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Why Do I Need Life Insurance in My 20s?

Life insurance is something many people prefer not to consider, especially young adults in the prime of their lives. Many think, “Why do I need life insurance in my 20s? I’m not planning to die soon.” If your goal is to be a financially responsible adult, you need to have life insurance coverage. 

Lake Region Insurance Agency can assist you with all of your insurance needs. Our independent agents serve clients throughout Greater Minnesota. Connect with us today for a free life insurance review and quote. We will discuss your best options for your stage of life. 

How Does Life Insurance Work?

Term life insurance is relatively straightforward. You choose a policy term, generally 10, 20, or 30 years. And you choose how much coverage you want, for example, $500,000. Each policy will have annual premiums that you need to pay.

If you die within the plan’s term, your beneficiary or beneficiaries will receive the amount indicated on the policy. For most people, a spouse or child is their beneficiary, but you get to choose who gets the money. 

Whole life insurance carries higher premiums but builds up a cash value that you or your family can access. Your agent can help you determine which policy fits your needs and your lifestyle.

Why Do I Need Life Insurance in My 20s?

Accidents and sudden illness happen, whether we want to acknowledge the fact or not. Your family’s protection under a life insurance policy is significant, whether you are in your 20s or your 60s.

Here are a few of the primary reasons to consider buying life insurance as a young adult.

Cover Expenses

If you have a spouse, children, a business, or a house, a life insurance policy is crucial. Accidents and sudden illness happen, whether we want to acknowledge the fact or not. Having coverage for your family’s expenses is the top reason young people should have life insurance.

A life insurance policy can help your loved ones cover:

  • Mortgage Payments
  • Childcare Expenses
  • Credit Card Debt
  • Student Loans
  • Funeral Expenses

Having an influx of cash during a difficult time can bring tremendous relief to your family. Even young adults need to think about this. As soon as you have anyone who depends on you for financial support, it is essential to have a sufficient life insurance policy in place.

Work-based life insurance policies are a great perk of your job, but they generally do not offer sufficient coverage. And if you leave that job, you lose the coverage. So it’s essential to have your own policy, too.

Lower Premiums

Insurance becomes costlier as you get older, so it makes sense to buy a policy in your 20s. Premiums go up about 8-10% for each year you wait to get coverage.

Even if you do not yet have dependents, having this protection in place is wise. You can lock in lower premiums, and if you do get married or have children, you can change the beneficiary to indicate that.

Easy to Qualify

Healthy young adults may qualify for life insurance easier.

As you get older, insurance carriers may put more medical stipulations on your ability to qualify for life insurance. Young adults, however, often qualify for coverage by simply answering some screening questions. 

But if you wait, and your health changes, you will find that your ability to qualify is challenging. And your rates will be significantly higher. 

For example, a healthy 25-year-old will find it simple to purchase a life insurance policy. But if that person receives a cancer diagnosis at age 29, they are in a difficult situation and may not be able to obtain a policy at that point.

When you buy a policy as a young adult, you won’t lose it unless you cancel it or stop paying the premiums. Securing a life insurance plan in your 20s is one of the best financial decisions you can make.

Peace of Mind

Life is unpredictable, and no one is immortal. Buying life insurance doesn’t make you morbid. Instead, it shows that you are responsible and thoughtful.

When you secure a policy in your 20s, you are setting up your family for success. Of course, no dollar amount can ever replace a person. But life insurance for young adults helps protect their loved ones just in case a tragedy strikes.

Life insurance provides tremendous peace of mind for your family. And if the worst were to happen, your forethought will make the situation more comfortable for them to bear.

Whether you choose a whole or term life option, you will be able to provide for your family even after you’re gone.

Young parents need life insurance.

How Do You Buy Life Insurance?

There are many, many options on the market. It can feel overwhelming to understand and choose the right policy for your needs. 

It is best to work with an independent agent who can help you find the right fit for your needs. An independent insurance agent is not limited in the policies they can offer. They can shop from multiple carriers to help you choose a plan that works for you.

This is a serious purchase that can affect your loved ones’ future. Work with a trusted individual who will answer your questions and walk you through the process carefully. 

Even if you can’t afford a large policy right now in your 20s, purchase what you can. You are likely to find options that cost less than $20 per month. And talk with your agent about riders that will allow you to increase your coverage as your income goes up.

The Coverage You Need

The team at Lake Region Insurance Agency understands that life insurance is not an easy thing to discuss. This means too many young people ignore it, unfortunately. But in a few short steps, your Lake Region agent can help you secure a policy that will protect your future.

Stop by one of our offices in New London, Willmar, or Cokato, MN. We offer free insurance reviews and quotes and can walk you through the whole process with ease.

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Term Life vs. Whole Life Insurance: What’s the Difference?

Protecting your loved ones in the event of your death or catastrophic illness is essential. People want to ensure financial security for their families but wonder about term life vs. whole life insurance. What are the benefits of each policy, and which one is the best fit for your family?

At Lake Region Insurance Agency, we help Minnesotans in Cokato, New London, and Willmar, MN. We decode the particulars of whole life and term life insurance, so you avoid confusion. And we shop from an extensive list of insurance providers so that you can select the policy that meets your needs. Give us a call today to receive a free insurance review and quote.

Why Do I Need Life Insurance?

A life insurance policy can help those you love to pay for expenses like rent, mortgage, food, and childcare. And life insurance payouts can help cover funeral and burial costs, as well. 

Even if you’re not the primary breadwinner in your household, you should consider carrying life insurance. You likely provide necessary care for your family that they will still need if you’re gone. 

The services that a stay-at-home parent provides carry a value of more than $178,000, making them costly to replace. A life insurance policy can help cover the cost of those tasks so that the household can keep running.

When purchasing a life insurance policy, you need to look at who in the household provides both the finances and general upkeep. You can then choose adequate coverage to continue your life with as little interruption as possible if the worst happens. 

What Is Term Life vs. Whole Life Insurance?

People often shy away from choosing a life insurance policy because they feel overwhelmed by the options. They may not know the difference between policies, so they just ignore this critical piece of their financial security. 

Owning a life insurance policy is too vital to ignore. So here is a breakdown of the primary two choices.

Term Life Insurance

Term life insurance means you purchase a policy that’s active for a specified period. You can choose how much coverage you have and the length of time you have it. You’ll pay a set monthly premium for your coverage that remains consistent throughout the length of the term.

Most term life policies come in chunks of 10, 20, or 30 years. These policies carry different premiums depending on your health and overall risk factors, such as:

  • Age
  • Gender
  • History of Smoking
  • Occupation
  • Chronic Illness: such as diabetes, heart disease, or high cholesterol

A term life insurance policy pays out only if the insured person dies. Generally, people choose this type of coverage until certain milestones occur. For example, you may want to select a policy term length that would cover you until:

  • You pay off your mortgage.
  • Your children graduate from high school or college.
  • You pay off all consumer debt.
  • You save enough money to retire comfortably and pay your living expenses.

This type of insurance policy carries no cash value for the person who owns it.

Whole Life Insurance

As the name suggests, this type of permanent life insurance covers you for your whole life. These policies provide a cash payout to your loved ones in the event of your death, just like term life policies. 

However, whole life insurance builds cash value over time, like an investment. The premiums for this kind of policy are considerably higher than term life policies, but they stay consistent as long as you hold the policy. You also lock in a guaranteed cash value rate.

Some whole life policies may also pay out regular dividends. You can take this in cash or use it to offset premium costs or obtain more coverage.

Choosing the Right Life Insurance Policy

So, how do you choose the best policy for your family? Here are a couple of questions to ask yourself. 

  • Are you caring for a loved one with a chronic illness or disability? If so, a whole life policy may be a good choice for you. You’ll pay more in a monthly premium, but you’ll also build cash value. This amount can help your beneficiaries cover any estate taxes as well as your final costs like funeral and burial.
  • How much can you afford in premiums? Permanent life insurance policies have higher premiums than term life plans. Depending on your current income, you may opt for a term life policy.
  • What are your health status and family situation? Your age, overall health, and the ages of your children can help you choose the right policy for your needs. You may opt for term life for lower premiums and invest the money you save in other retirement accounts. 
  • Are you looking for an investment option? Term life does not carry any value unless the policyholder dies. Then it pays out to the beneficiary. Whole life, however, does have a value that can be part of an investment strategy. It can also offer a cash payout if you surrender the policy.

 

How Much Coverage Do I Need?

A good way to calculate how much coverage to purchase is to multiply your annual salary by 10. The cash benefit of either a term or permanent life insurance policy should be enough to replace your income for several years.

If you are purchasing life insurance for someone who does not have income, choosing an amount can be trickier. Consider what it would cost to replace what they do for the household. Would you suddenly need to pay for childcare or housekeeping? Would you need to hire someone to do grocery shopping? All of these needs deserve attention.

Lake Region Insurance Agency Takes Care of Its Neighbors

We’ve seen our community in Greater Minnesota through some of the toughest challenges life dishes out. We can help your family feel secure in times of uncertainty.

And if you’re still not sure about term life vs. whole life insurance, we have you covered. Get answers to all your questions about life insurance and more with a free consultation. Call one of our independent agents today, and let’s get started.

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5 Reasons You Need Life Insurance and How to Get It

Very few people want to think about life insurance. It’s uncomfortable to think about the circumstances that would lead to a loved one cashing in your life insurance policy. Despite the discomfort, however, the fact remains that life insurance is crucial. And ignoring it can be harmful to those you care about deeply.

Purchasing a life insurance policy gives you and your family tremendous peace of mind. And it helps you ensure that your loved ones do not have their lives turned upside down any more than necessary.

Not sure where to start? The staff at Lake Region Insurance Agency is here to help. We can work with you to navigate the process so that your family and assets have adequate protection.

Why Do I Need Life Insurance?

Spoiler alert: no one lives forever. Until science catches up with science fiction, we all will pass from this earth eventually. And since you can’t accurately predict when that will happen, you need to have a protective policy in place. Here are five key reasons you should purchase a life insurance policy.

1. You have dependents who rely on you.

Does anyone in your household depend upon your income? If so, life insurance is essential to provide for them in the event of your death. Responsibly planning for their needs is an act of love. A life insurance policy is critical if you have any of these dependents:

  • Children 
  • Spouse/Domestic Partner
  • Siblings
  • Parents
  • Disabled Relative 

Take into consideration anyone you’re responsible for who cannot support themselves if something happens to you.

A life insurance policy is particularly important if your spouse or partner is a stay-at-home parent. When one partner passes away, the bills don’t change. You want to ensure that your other half can handle the necessary expenses even with a tragic change of circumstances. 

It is also important to have a policy for the stay-at-home parent. If something were to happen to them, the surviving spouse suddenly might need to pay for new expenses. Daycare, housekeeping, or other services to keep the household running could become necessary.

Portrait of three siblings

An adequate policy can also make it possible for your children to attend college or have funds for a downpayment on a home. These things can still happen in your absence if you purchase a good life insurance policy.

2. You have a mortgage to pay.

If you and your family are living in a home with a mortgage, the house could be the first thing to go if you die. Death does not mean that your loved ones get a break from making the mortgage payments. 

A life insurance policy can give you confidence that your family can meet its obligations and stay in the home if they choose to do so. No one wants their family to have to handle the trauma and stress of losing their home, relocating, and managing property issues. Processing a death is stressful enough. 

A life insurance policy can require that the mortgage be paid off with the funds. Or it can merely provide enough cash for your loved ones to meet the monthly payments.

3. You need to cover funeral expenses.

Something that many people don’t realize is that death is quite expensive. The average cost of a funeral in America runs about $7000 to $12000. This amount is a considerable sum of money to need suddenly. 

Many life insurance policies will include funeral costs as part of the package, leaving one less thing for your family to worry about after your passing. 

4. You have debts or taxes to pay.

Death can also result in a heavy financial burden in the form of taxes for those left behind. These obligations automatically pass to your heirs and can have a significant impact on their inheritance. 

If you die with any consumer debt, such as car loans or credit card balances, your estate will be responsible for paying those. A life insurance policy can provide funds for your family to dispense with these debts.

Without life insurance, they may have to sell assets to cover the costs, and this leaves them at a disadvantage. A sufficient policy ensures that a chunk of money is there for them to cover any debts or taxes the estate may owe.

5. Your lifestyle makes you more vulnerable.

Insurance is a numbers game. And from taking a high-risk job to enjoying thrill-seeking sports, there are lifestyle choices that make death statistically more likely. 

If this sounds like you, it is the right choice to make sure your loved ones have protection when you’re gone. And if those life circumstances change, you can always adjust the policy to reflect a lower-risk lifestyle.

Take responsibility for your choices, career, and preferences by taking care of your family. Give them protection and peace of mind if the worst thing were to happen.

How Do I Get Life Insurance?

Since you now know that life insurance is the best way to go, there are a few other choices to make. The first decision is whether you would prefer a lifelong or term policy. A lifelong selection covers you until you die. The term option is for a specified amount of time, such as until your children are 25 years old. 

You will also need to determine the beneficiaries and any specifications you would like included, such as funeral costs. In addition, you’ll need to choose the value of the policy. Your Lake Region broker will be able to help with this decision.

Depending on your age and the value of the policy you want to purchase, you may need to have a medical assessment. Typically, this screening is minimal. It often involves having a nurse come to your house to take your vitals, ask some questions, and possibly do a blood draw.

Work with an Expert

Here at the Lake Region Insurance Agency, we have the tools you need to secure a comprehensive, personalized policy that is the perfect fit for your family. We offer options for our clients in Cokato, Willmar, and New London, MN, and beyond. Call or stop by any of our offices for a free Insurance review with one of our professionals.