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 21, 2017, Forbes.com article, student debt loan topped $1.3 trillion with more than two-thirds of students graduating with debt. There are over 44 million borrowers in the US currently, with the average Class of 2016 student facing $37,172 in student loan debt.1
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 only something their parents buy to protect themselves in case one of them dies so the surviving spouse is not saddled with paying all the 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 were to buy life insurance today, it would likely ensure that you would 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 permanent 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 permanent 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.2 It's hard to imagine now, but you just never know.
If you are single, don't overlook the need for life insurance.
2 Loans against your policy accrue interest and decrease the death benefit and cash value by the amount of the outstanding loan and interest.