In their 20s, young people are full of hope and optimism towards their future. They tend to be adventurous and don’t shy away from taking bold steps in their personal or work life during their 20s. The display of optimism and courage by youngsters in their 20s is surely impressive and idealistic, but it also makes them overlook investment habits early in life since they are young and healthy. One such investment tool is life insurance that gets neglected by young people in their 20s, but can help them build a fortune for the future, in addition to protecting them and their dependents during any emergencies like ailments, accidents or in the event of death.
Reasons to Buy Life Insurance in 20s
Investing in life insurance is much easier, affordable, and beneficial for individuals in their 20s than in their 30s or 40s. Here are a few reasons to buy life insurance in 20s:
#1. Early Bird Advantage
The premium of a life insurance policy depends on the age, health and lifestyle of the policy subscriber. An individual is generally healthy in his 20s and purchasing life insurance in 20s would be cheaper as compared to buying it in his 30s or 40s. Unless the policy subscriber regularly indulges in hazardous activities like smoking or risky professions like skydiving, or suffers poor health, the premium paid towards a life insurance policy is much lower than that of the policy purchased in his 30s or 40s. Although, the individual may continue to be healthy even in his 30s and 40s, the life insurance policy bought in these ages shall mostly charge a higher premium.
#2. Financial Support to the Dependents
Young people, nowadays, start their careers in their early 20s to support their families financially. Buying a life insurance policy in 20s provides the much-needed financial support to an individual’s dependents – parents, spouse or children, in his absence in the form of death benefit. A good term insurance plan also safeguards an individual’s family from the burden of loans or liabilities that an individual might leave behind in the event of his death.
#3. Investment Vehicle for Retirement
Investing in early 20s creates a hefty savings corpus for retirement life. The premium paid towards beneficial ULIPs or retirement pension plans accumulate a sizable amount of cash value throughout their policy term. The accumulated savings shall serve as a post-retirement pension fund. Also, investing in life insurance in your 20s also gives scope to experiment with higher risk forms of investment and diversify the investment portfolio, instead of putting all eggs in one basket.
#4. Getting Futuristic with the Policy
An individual in his 20s might not feel obligated to buy a life insurance policy since he may not have any dependents today. However, it is important to note that purchasing a guaranteed saving plans in 20s can be fruitful so that in future when there is a need to buy your own house, or car, or any other asset, you have enough savings in your hand that you can pay at least the down payment.
Although an individual may not have any needs, dependents, or debt today, it is wise to think futuristic while buying a life insurance policy. Thus, it is safe to buy a life insurance policy in 20s and leave some financial assistance for those who survive the individual in the event of an unexpected tragedy.