• Income Insurance

Why buying life insurance when you're young makes sense

3 min

If you're young, you may not have given much thought to buying life insurance. But buying life insurance when you're young can make a lot of sense for a couple of key reasons. If you put off buying life insurance until later in life, you run the risk of passing your funeral costs to your heirs if you happen to pass away unexpectedly. And while you may be willing to take that risk, you'll also likely end up paying more for the same amount of insurance if you wait until you're older.

The case for life insurance

When you're younger, you have a wide variety of different things you could be saving for. Retirement, kids' college, an emergency fund are all competing for your dollars with insurance products. While you may think that you can "get by" without buying life insurance, there are a few compelling reasons to buy life insurance when you're young.

A good rule of thumb is that if there is anybody that is depending on your income, you need to protect them in the case of your unexpected death. If you are married with no kids and you and your spouse both work, life insurance may not be as crucial compared to if you are the sole breadwinner for a spouse and children. If you pass away, it will have a devastating impact on the mental and emotional health of those you leave behind. It is your responsibility and duty to make sure that they don't also have a negative financial impact.

When to get life insurance

Since you're statistically very unlikely to die when you're young and healthy, you may think that you can delay buying a life insurance policy until later in life. One thing that you'll want to consider is that already having an insurance policy in place can make it easier to buy additional insurance as your life situation changes. That can be a reason to buy life insurance when you're young, potentially even before you get married or start supporting a family.

Insurance will never be cheaper

The other reason to get life insurance when you're young is that life insurance will never be cheaper for you then when you’re young. Most insurers price the cost of their policies based on actuarial tables that determine how likely they are to have to pay out on the policy. Because of that, generally speaking, the younger you are, the cheaper the cost of buying an insurance policy is. Also, the healthier you are, the cheaper the cost of a policy will be. Both of those factors work in your favor for buying a life insurance policy when you're younger.

How to afford life insurance when you're young

When you are first starting out in your career, you may not have a lot of extra money to go around. And with so many competing priorities, you might think that buying life insurance is one that can wait. But if you've decided that the cost of NOT getting life insurance is not worth it for you, you may be wondering how you can possibly afford to get life insurance.

The first thing to keep in mind is that the monthly premium cost of a life insurance policy may be less than you think. As we've mentioned already, when you're young and healthy, the cost of an insurance policy is cheaper than it will ever be in your life. If you get a few premium quotes from different insurers, you might find that you can work it into your budget.

Disability insurance vs. life insurance (get both!)

So far we have talked about life insurance, but another type of insurance that you might want to consider is disability insurance. Disability insurance (or disability income insurance as we at Asteya like to call it) can help replace the income that you might lose if you were not able to do your regular job. If you have people in your family that depend on your income, you'll definitely want to consider disability insurance in addition to life insurance.

Unlike many other insurers, Asteya doesn’t require a medical exam, blood work, or a doctor's appointment to qualify for a disability insurance policy. Once your policy is in place, you just need to keep making the premium payments and you're protected against illness or injury that prevents you from working and earning an income.

The Bottom Line

If you're young, you may think that you don't need to buy life insurance until later in life. The fact of the matter is that the best time to buy life insurance for many people is when they're young — even before you have a defined need for it. While you should always make sure that you have sufficient life insurance to replace your income if there are people that depend on it, you should also consider buying life insurance even earlier.

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