As I finish up my bachelor’s degree I find I have more concerns than I can count, as does every other classmate I know. Do I want to continue my education? Where will I be working? Where will I live? How much should I start investing? Life insurance is never the first thing on the list, but Term Life can be a great tool for young adults. It is not always easy to know where your life is going when you graduate though it is very clear that graduates need to build relationships and protect those who they have relied upon until now. Life insurance is not necessary for everyone so now is a good time to assess if and when it will become necessary.
Student loans are on the forefront in many minds. According to the National Association of Consumer Bankruptcy Attorneys parents are averaging $34,000 in student loans and students are averaging $27,000. With higher loan requirements some students start to supplement government loans with private loans which need to be co-signed by loved ones. Unlike government loans, private student loans persist after death. As the cost of schooling rises the choice to insure becomes that much more urgent. Many find it difficult to cover their debt obligations in the best of times, but if the worst were to happen difficulty can quickly turn into impossibility. To help prevent a potential burden on my family, I keep a Term Life policy that will help pay off my obligations should something happen to me.
Now is an especially good time to consider Term Life Insurance because if you are a healthy and young individual you are more likely to fall into preferred price brackets, where premium costs are the lowest. A non-smoking 20 year old female in excellent health might pay around $315 a year for a 10 year term policy with a $500,000 death benefit. At 40 in less prime health conditions she might pay closer to $675 a year for the same policy. Term Life Insurance is fairly simple to understand; you pay a set premium for a set period of time for a set death benefit. The amount you pay into the plan does not accumulate or hold value. Once the term is over nothing carries forward. Since Term Life Insurance carries no value the premium costs are far lower than other life insurance policies. Terms can vary from a yearly renewable policy, which are re-evaluated after each year, to a potentially longer level term life insurance policy, which remains at a level rate until the end of the term. To find the best term structure I spoke with an agent that helped me to decide what matched best with my situation.
Even if you are not concerned about student loans, major life decisions are on the horizon. Perhaps you are starting a family or looking to buy your first home. If the unforeseen were to happen the valuable contribution you provide would be gone and the burden of debts will fall upon your loved ones. Term Life can be an excellent tool to alleviate these concerns and, if the policy is convertible into a whole life policy, a good starting point for your long term plans. Put your hard earned research power to work and find out if Term Life Insurance is best for you.