If you’re youthful, in good health, and not planning to wed or start a family soon, you might perceive life insurance as unnecessary. However, there are exceptions. To assess whether you require life insurance, consider these four questions. A "yes" to any could signify that it’s time to ponder over a policy.
Irrespective of your age, you might have individuals financially relying on you. This could be older parents or younger siblings. According to Uziel Gomez, a certified financial planner with Equalis Financial in Los Angeles, it's only when you have dependents who could suffer financially from your potential demise that life insurance becomes a crucial aspect of your financial planning.
If you’ve cosigned a loan with a relative, partner, or friend, they'd inevitably become entirely responsible for the remaining debt if you pass away before settling it. To avoid this, a life insurance policy is advisable.
For young entrepreneurs, your business partnership could bind you closer financially than your family ties. If one partner passes away prematurely, the remaining partner might face significant financial difficulties like settling debts, managing daily expenses, or even purchasing their partner’s share of the business. A life insurance death benefit can provide a financial cushion in such a scenario.
Life insurance becomes more expensive and challenging to qualify for as you age or if your health detriorates. So, investing in a policy when you are young and healthy can be cost-effective.
However, it's crucial to select the right life insurance product, as buying the wrong ones might lead to unnecessary expenditure. Term life insurance is considered cheaper and easier to comprehend. You purchase it for a set number of years; after this period, it expires.
While some young people might need life insurance, often it's reasonable to wait until they have children, other dependents, or shared debt. However, waiting too long also adds significant costs. Hence, the decision to buy life insurance should be a balance between current needs and future financial obligations, supplemented by professional financial advice.