Raising a family might feel like a huge responsibility, but what if the unexpected happens and you lose the primary breadwinner in the family? Although nothing can bring back your loved one, having life insurance for young families can ease some of the financial burden.
Life insurance for young families can come into play when tragedy occurs, helping lift some of the load. Often, people underestimate the importance of life insurance because they think, “I’m young and healthy. I don’t need it.” However, securing a family life insurance plan while you’re young is a smart move, as you’ll discover by reading this article.
Why Timing Matters with Life Insurance
Timing is a key factor in securing a life insurance policy. On the one hand, when young adults think about this type of coverage, they may only think about their current health. When you’re young and healthy, you may assume you will not need such a policy. Waiting until you’re older might seem reasonable. But this is one of the myths about this type of insurance. When it comes to a policy such as this, timing is everything if you want to capitalize on savings and ensure your family is financially set if you pass away.
Lower Premiums for Young Applicants
Since younger applicants have less risk of needing to cash in on their policy, the premium cost for such a plan is much lower. Underwriters evaluate an applicant’s age and health, along with other factors, when determining the premium rates.
Locking in Rates Before Health Changes
As indicated above, one of the advantages of purchasing life insurance for young families is that the premiums will be much lower. On top of that, you can lock in the rate for the lifetime of the policy. That means if you purchase a plan when you’re young and healthy, it’s not going to change later if or when your health changes. You can count on a steady low rate no matter what happens with your health.
Life Insurance Options for Young Families
There are different types of plans from which to choose when purchasing a policy. It’s best to understand the various options for young families. That way, you can select the policy that works best for your family and budget.
Overview of Coverage Types
Life insurance comes in different forms, some are for a set time only and some are considered an investment for a lifetime. The two main types of life insurance coverage for young families includes the following:
- Term life insurance — This type of coverage is usually the most budget-friendly and is good for a specific time. For example, it may be a 10-, 20-, or 30-year policy. It will pay a death benefit if the policyholder dies during the term. This is good for parents and spouses who want to make sure their families are taken care of through childhood. It can be used for anything, but is helpful for paying off a mortgage, funeral expenses, school and more.
- Whole life insurance — With this plan, you will have lifetime coverage that includes a guaranteed benefit in case of death as well as a component for cash value, meaning as your policy builds wealth, you can use it for loans and more. Premiums may be higher, but they will remain fixed, allowing young families to budget this into their expenses.
Although these coverage types are most common, young parents and families may also consider these other options:
- Universal life insurance — This plan is permanent but comes with more options for flexibility. It includes both components of whole life coverage (guaranteed death benefit and cash value). Additionally, you will have the option of a flexible premium, which allows you to increase or decrease coverage as your budget allows.
- Final expense insurance — Coverage for this type of policy includes end-of-life costs. It is a permanent policy that allows the remaining loved one to use the death benefit payout to cover these expenses.
- Guaranteed-issue life insurance — In most instances, people must answer medical questions or be examined by a physician to receive a policy. With this policy, you don’t have to provide any medical information.
How to Evaluate Costs
It’s important to weigh the pros and cons of the different policy types. Working with an experienced agent can provide the necessary insight into what may be the best option for you and your family.
When evaluating the cost of purchasing life insurance, new parents may want to consider the following:
- How much coverage do they need to keep the family secure if the main wage earner were to die?
- Do they anticipate needing to borrow against the policy later?
- Should new families consider a policy for their children?
- What are the costs for different coverage amounts?
By comparing different plans and associated premiums, you can find the most affordable rate for your family.
Building a Financial Safety Net for Your Family
One of the biggest reasons why having this type of policy is so important is its ability to offer financial security to your family should something happen to you. If the main wage earner dies, the rest of the family has a financial safety net with life coverage. This provides a cushion against mortgage payments, daily expenses, everyday bills and, later, college.
Income Replacement and Debt Protection
It’s not uncommon for young families to have significant debts, such as student loans, car payments, and/or a mortgage. The benefit of a term life insurance plan is it provides a financial buffer in the event that something unfortunate occurs and a loved one dies. The remaining family members will not suffer due to financial obligations.
Planning for Long-Term Goals
One benefit of having a whole life policy is its cash value. In addition, the value grows with time. As the policy ages, the cash value increases. You can borrow money against this cash value.
Purchasing a policy when you’re younger allows time for the cash value to grow and become useful for borrowing.
Benefits of Locking in Life Insurance Early
Dealing with the many challenges and stressors of raising a young family can be difficult. There are many uncertainties that go along with being a young adult. Locking in life insurance when you’re young provides you and your loved ones with peace of mind, assuring you that financial stability remains even if the unexpected happens.
You also benefit because you will get a lower rate when you’re younger.
Protecting Financial Futures
Take time to sign up for coverage now so that you protect your loved ones financially in the future. Between the death benefit and cash value, you and your family can rest easy knowing that things will be taken care of in the event of an untimely passing.
Ensuring Stability for Dependents
Families can protect their future against unexpected loss, rising costs, and health-related coverage challenges when they secure a life insurance policy. This is particularly important if you have young children. With the many expenses your children will have throughout their lives, getting a payout when they need it will ensure they can live life comfortably.
Secure Your Family’s Future and Get a Free Life Insurance Quote
Find the best affordable life insurance for young adults when you contact Southern Harvest Insurance. We will give you a free quote and go over the different policy options. Southern Harvest Insurance is ready to assist you in securing coverage that fits your needs. Talk to an agent today about a free quote. Get in touch with a representative by calling (877) 831-4677, stopping by one of our locations, or visiting us online.
FAQs
Why Is It Better to Get Life Insurance at a Younger Age?
Getting life insurance at a younger age is optimal because your age and health are driving factors in your premium rates. These rates are locked in based on your health at the time and will not go up later if your health changes. This allows you to have financial security without paying an extremely high price.
Additionally, starting young can provide financial protection for loved ones sooner while also building cash value in certain policy types over time.
How Soon Should I Consider Buying Life Insurance After Starting a Family?
You should consider purchasing a plan as soon as you start a family. You may even want to consider it during pregnancy. This ensures your loved ones are protected right away. The earlier you purchase coverage, the lower your premiums will likely be. You also avoid the risk of health changes that could impact your low rate.
Can Life Insurance Policies Be Customized for Young Families?
You can purchase a life insurance policy to meet your unique needs as a young family. If you have young children, you can choose more coverage to help cover the costs of a mortgage, educational expenses, and more. An agent can customize your coverage to extend term lengths, coverage amounts, and other benefits. Some plans allow for flexibility in the coverage if the family grows.
Should Both Parents Have Life Insurance?
Yes, both parents provide benefits to the family and need to have coverage. If the main wage earner dies, the obvious benefit of coverage is replacing the lost income. But even a stay-at-home partner provides monetary services that can be supplemented with a policy. For example, the work they do, taking care of the children, preparing meals, house cleaning, and so on, will cost money to replace.