Should I get life insurance in my 20s? | EfPrime Finance
Should I get life insurance in my 20s? | EfPrime Finance
If you have a family in your 20s, you might want to think about getting life insurance. Life insurance can be expensive because the longer you live, the more risk there is that the company will have to pay out money. If you are going to buy life insurance, it's always best that you do so before something happens.
So if anything were to happen and your children would need financial protection or care if they were left alone, it's better for them that they know their parents had a plan and bought life insurance for them in their 20s.
It is never too early or too late to get life insurance as long as you're healthy and insurable. But it's better to get life insurance if you're going to stay healthy. Aside from accidental death benefits, it might be a good idea to get things like disability insurance, critical illness coverage, hospitalization coverage, and a health card. If you have a family and you need to pay out money for things like food or clothing, you'll have a lot fewer worries if the money is there when your loved ones need it.
A life insurance policy can also help if your employer has made a mistake that leaves you behind in your retirement plan contributions or if they take away your company retirement package. You can also use the money in the policy to pay off debts and other bills.
There are a lot of things to consider when you're deciding whether or not to get life insurance. You have to decide while you're healthy enough, and then you have to think about how long you will live and how much money the policy will payout.
Generally speaking, longer life equals a higher payout because of the high probability that one will live longer than expected (expected being from age 75 or so on). So if you are going to make a decision to get life insurance for yourself, be sure to do it early and ask the insurance company what they recommend. As a tip, buying your life insurance in your 20s will save you thousands of premiums as the younger you get life insurance, the cheaper is the cost of the insurance. In addition, if you buy a Variable Universal Life (VUL) life insurance, the earlier you buy a policy, the higher is the investment returns that you can withdraw at any time (depends on the policy you bought). It is likewise better to buy a longer-term paying life insurance as compared to a shorter-term period paying life insurance to spread the cost of the life insurance.
Is VUL better than Term Insurance?
Yes, VUL is better than term insurance. Contrary to what most finance personalities preach, some VUL insurance is better than term insurance (in terms of returns and convenience). The primary contention of the finance experts is that investing in term insurance will lead to a lower cost of insurance. Why VUL is better, read the following:
- Investing in VUL is better option for investors who have little knowledge about investing in platforms such as stock market, bonds, real estate, cryptocurrencies, Forex, commodities, ETFs, Mutual Funds, index funds, among others. Otherwise, term insurance is for you;
- Investing in VUL will provide you permanent protection as long as you continue to pay your life insurance premiums. However, term insurance is temporary, if you are diagnosed with a critical illness after years of being insured, chances are you will not be able to renew your life insurance coverage. Moreover, the coverages of VUL insurance addresses more life risks as compared to that of term insurance. Some term insurances do not insure critical illnesses, which in my opinion, one of the most important aspects why people should buy a policy;
- Investing in VUL will provide you with convenience. Convenience in the sense that when you miss your premium payment, your policy will not automatically lapse, it will consume grace period first and will apply your investments first before it will lapse. On the other hand, term insurance will lapse after the grace period is over, hence, if something happens to you, your family might get nothing out of your life insurance policy;
- In terms of returns, some VUL insurance has higher returns as compared to the returns you make when you choose the buy term to invest in the difference (BTID) strategy. People can beat returns of VUL insurance, but not all people are gifted with the intelligence to do that. If you want peace of mind, save yourself from pain in the ass and better choose VUL insurance. Here is my recommendation: Philam Life Family secure.
Seek the services of a Financial Advisor to maximize the use of your hard-earned income. Prior to buying your first policy, make sure that you really would like to do it so as not to waste your money, effort, and time.
Book my services as Financial Advisor.
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Disclaimer
The Author is advising readers to consult with your respective Financial Advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that you may incur are imputable to your respective decisions.
The author does not in any way provide a guaranty as to the effectiveness and quality of the products and services that are featured in this blog. The products and services were advertised based on personal experience and product and service reviews that the product/service received.
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