When Should You Get Life Insurance?

If you’re young, single, and think you don't need life insurance, you may want to reconsider, especially if you’re paying off student loans.

According to a February 25, 2019, Forbes.com article, student loan debt topped $1.56 trillion. ¹ There are over 44 million borrowers in the US currently, with the average Class of 2019 student facing $31,172 in student loan debt.²

That's a whole lot of debt, some of which you may carry. But if you were to die before your debts were paid off, who do you think would have to assume that burden?

Well, depending on the type of debt and its terms, if you have a cosigner, such as your parents or grandparents, it will likely be them, or possibly their estate if they are no longer living. Think about that before you say you’re young and single and couldn't possibly have a need for life insurance. You may need it just as much as someone raising a family.

Truth is, people rarely consider life insurance while they're in their twenties because they mistakenly believe it is something only parents buy to protect themselves in case one of them dies, so the surviving spouse is not saddled with paying all the family expenses.

And although you may not be married yet, or perhaps, like an increasing number of young Americans, marriage is not part of your plans for the foreseeable future, your death would still have a financial impact on your loved ones.

Plus, there are a number of benefits you gain by purchasing life insurance at a young age.

First, if you buy life insurance today, it will likely ensure that you will be eligible for insurance in the future even if the state of your health changes.

Second, the older you get the more expensive insurance becomes. However, the opposite is usually true if you buy now. The cost of whole life insurance essentially "freezes" at the rate when you first purchase it, as long as you continue to pay the premiums.

Look ahead. Who knows what college financing will look like in the future? With whole life insurance in place, you may be able to take a loan against the cash value of the policy to help your kids or grandkids with their education.³ It's hard to imagine now, but you just never know.

If you are single, don't overlook the need for life insurance.

¹ Zack Friedman, “Student Loan Debt Statistics in 2019: A $1.5 Trillion Crisis,” Forbes.com, February 25, 1019. http://www.forbes.com/sites/zackfriedman/2019/02/25/student-loan-debt-statistics-2019/#10493ab7133.

² Natalie Issa, U.S. Average Student Loan Debt Statistics in 2019,” Credit.com, June 19, 2019. https://www.credit.com/personal-finance/average-student-loan -debt/

³ Loans against your policy accrue interest and decrease the death benefit and available cash surrender value by the amount of the outstanding loan and interest.