Life insurance is a commonly misunderstood type of coverage, especially among young people, because it isn’t much fun to talk or think about – but it is important.
One prevalent misconception about life insurance is that you don’t need it if you are young, strong and healthy. Sadly, accidents and tragedy can happen to anyone, so here are four reasons why purchasing a life insurance policy is smart and reasonable at any age.
- What happens to your debt? No, death does not always excuse you from unpaid bills. If you die with debt, that responsibility can fall on someone who cosigned that loan like your parents or a spouse/partner. Unexpected debt could be an overwhelming burden for already grieving family members.
- Lock in a lower rate! When you’re out on your own for the first time in your life, there are certain reoccurring costs that come with that freedom: student loans, rent, utilities, cell service and big purchases like cars and furniture. The idea of another monthly fee can be difficult to swallow. However, purchasing life insurance while you are young and healthy is wise because you’re considered “low risk” and can lock in a lower rate. Try sacrificing something you don’t need once a month – dinner out, concert tickets – for something that you and your loved ones could need in the future.
- Support for your dependents. Even if you’re single and have no dependents today, there may be people in the future – parents, children, partners – that will rely on any income you bring in and responsibilities you handle. When that time comes you’ll probably be glad you’ve prepared – and so will they.
- The devil is in the details. Life insurance covers things you may have never considered before – such as funeral expenses, cancellation fees, and other miscellaneous charges that follow death. Also, while your employer-offered life insurance should cover some financial obligations, it’s a good idea to look into a separate policy to make sure you and your loved ones are fully covered for any unwelcome and costly surprises.
It is always a good practice to expect the unexpected and be generally prepared for anything life throws your way. Investing in a life insurance policy can help provide financial security if you’re no longer around. Talk to a financial advisor associated with Waddell & Reed to discuss your plan and learn more about the benefits of life insurance.
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This information is provided for informational and educational purposes only and may include references to concepts that have legal, accounting and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to assist in understanding the issues discussed. Waddell & Reed does not provide tax advice. Waddell & Reed believes the information has been obtained from sources considered to be reliable, but does not guarantee the accuracy of the information provided.