Life Insurance - Do Young People Really Need It?
When you're young, often the last thing on your mind is life insurance
. Life insurance protects your loved ones when you are gone, and when you're in your twenties and thirties that can be hard to imagine. So why do young Canadians need life insurance? There are many reasons why it makes good sense for a young Canadian to obtain life insurance.One of the primary reasons that it is a good idea to seek life insurance when you are young and in good health is that this is when life insurance is the most affordable. The younger and healthier you are, the cheaper your life insurance will be.
Life insurance can be negotiated on a term, hence the term "term life insurance," for ten or twenty years. This means that during your life insurance term your premium and coverage is guaranteed. Life insurance can also be negotiated for the duration of your life. These policies are called "whole life insurance policies," which means that your premium and coverage is guaranteed for life. Whole life insurance policies can also be used as an investment and savings vehicle.
It is important when arranging a life insurance policy that you work with a life insurance broker who underwrites the policy at the time you obtain it. This will ensure that the life insurance company has validated the state of your health and that they won't have any reason not to pay out the benefit to your loved ones should something happen to you.
Life insurance arranged through a life insurance broker will result in a contract for life insurance being provided to you once the insurance policy is bound. This means that your premiums and coverage are locked in. Sometimes things in life change and you may want to reduce, increase or cancel insurance coverage. While you can adjust your contract for insurance, your Life insurance provider cannot. As long as you pay your premiums, your insurance is guaranteed no matter how your health or lifestyle changes.
Even if you are in your twenties you are likely able to anticipate if your future includes children and a family, and once this occurs the financial security of your family will become an important concern. As we age, our health changes. Age alone causes life insurance premiums to increase. Changes to health and lifestyle can also cause life insurance premiums to increase, so it is your best bet to get your life insurance provider to commit to a long term life insurance contract with you when it is most affordable.
When you are young, the type of life insurance coverage that you choose will depend on your future financial goals. Do you plan to have a family? Do you plan to amass investments? Is there anyone who may rely on you financially (parents, siblings, etc..)? If you are unsure where your future will lead, term life insurance products tend to be the most basic and least expensive and would be the minimum insurance that you should look at in the absence of a long term vision for the future.
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