Many young parents assume life insurance is something to worry about later in life — but waiting could be a costly mistake. With the rising costs of childcare, education and everyday expenses, securing a financial safety net early is one of the smartest decisions parents can make.
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Not only is life insurance more affordable when purchased at a younger age, but it also ensures that your children and partner are financially protected in the event of the unexpected.
Here’s why getting life insurance sooner rather than later is a crucial step for parents looking to safeguard their family’s future.
This is the most essential reason to have life insurance: your income — or the value of the care you provide — helps keep your household running. If you work outside the home, your family almost certainly depends on your income. But even if you work inside the home, your caregiving role also carries significant financial value.
“Your family depends on the care you give, which would cost a lot of money for someone else to provide,” said Melanie Musson, a life insurance expert with the site QuickQuote.com.
A life insurance policy benefit can replace that income or cover the costs of childcare and other services if you pass away unexpectedly. The younger your children, the more years your family would need to make up for that shortfall — making coverage that much more crucial.
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The biggest benefit to getting life insurance when you’re young is that you’ll likely pay lower premiums due to your age and health status.
“If you lock into a 30-year term life insurance policy and you’re in your 20s, you’ll be paying the same premium when you’re 50 and could never dream of getting a policy so cheap,” Musson said.
However, according to Jason Turchin, Esq., a national life insurance lawyer, young couples should also be mindful of the type of policy they’re buying. Term life insurance expires after a set period, whereas whole life and universal life policies generally last a lifetime and may build cash value over time.
“They should also review their policy to see if it is an AD&D policy, or Accidental Death and Dismemberment policy, which often has many more limitations than a traditional life insurance policy,” he pointed out.
Though no couple plans to divorce, when buying life insurance, it’s important to discuss what would happen to the policy should the couple get divorced, Turchin said.