If you are a recent college graduate in the process of comparing life insurance quotes for young adults, it is important to understand what types of products are available before you proceed with submitting your life insurance application.
Because college does not generally teach students the ins and outs of life insurance, many young adults are not familiar with the types of products that are available when they are in the process of pricing the cost of insurance. Understanding what types of policies that are available and how much insurance you will need is extremely important. Read this straightforward guide on young adults life insurance and find out everything you need to know before you start retrieving quotes. Read also: ABC’s of Life Insurance Dividends.
Why Do Young Adults Need Life Insurance?
Just because you are young does not mean that you have no need for life insurance. While your chances of dying before your 30th birthday are slim, it is important to prepare for anything so that your family does not have to pick up all of the pieces without any help. If you are single and you do not have any children, you still have family members that your bill collectors can come after if you pass away.
With so much racked up in student loans, the lender is going to try to recoup their money from someone. You also have to consider the cost of a funeral and how much that could set your family back if you do not have life insurance. When you are buying life insurance as a young adult, you do not need a large death benefit. In fact, having even the smallest policy is better than having nothing at all. Read also: Understanding Your Life Insurance Options.
What Are the Most Common Life Insurance Products for Young Adults?
Now that you understand why you need life insurance, it is time to review which products are best for adults in their 20′s. The two most common type of policies that are available are term and permanent life insurance policies. While they both offer you protection, both of these products have their benefits and their drawbacks for young adults. It is now time to compare the benefits and drawbacks of each type of policy so that you can make an informed decision.
What is Term Life Insurance?
If you are shopping for an inexpensive plan, the most inexpensive choice is to buy a term life insurance policy. Term life insurance is a temporary policy that will provide coverage at a fixed rate for a specified period of time. If you buy a 5-year term, your premiums will remain level for 5 years. When the term is up, your policy will be up for renewal and your premiums will be rated at your current age. You may also be asked to take a health exam to prove you are still insurable. Read also: Why Seniors Need Life Insurance?
Term life insurance is a very popular type of young adults life insurance because it is very inexpensive. If you are healthy, you can find companies willing to cover you for just pennies a day. Term life insurance will also provide you with a larger death benefit for much less money.
What is Whole Life Insurance?
Another product to consider when requesting life insurance quotes for young adults is permanent insurance, also known as whole life. Many life insurance agents say that whole life insurance is like buying a home and term insurance is like renting. With a whole life policy, you will earn equity in your policy as you pay your premiums. This means that you can borrow against your account value without ever having to pay back the amount you borrow. You also have peace of mind in knowing you have coverage for your entire life, as long as you keep your premium payments up to date. Read also: Life insurance for women.
While there are some obvious benefits, whole life insurance is very expensive compared to term life. One factor you must consider is that permanent life will just continue to increase in price as you age. There will be a point where you will not be able to afford the premiums if you choose not to buy a whole life policy while you are young.
If you are in the process of requesting life insurance quotes for young adults, you are taking steps to prepare for your future. Now that you are done with college it is time to plan ahead and to make sure your family will be provided for if you pass away. Consider the long-term and short-term benefits of each policy and be realistic when you are budgeting for your life quotes. Read also: Life Insurance Later in Life.