Life insurance is an agreement that one makes with an insurance company that, in exchange for premium payments, the company will provide a given sum (death benefit) to beneficiaries in the event of the insured’s death. But who qualifies as your beneficiaries? Is there a minimum age for life insurance? And how much should you be insured for?
The Age of Policyholders
A common myth is that age is a major factor for anyone in need of life insurance. Young people in their 20s and 30s often do not believe that this plan applies to them — only when they have children or enter middle age. However, no one is too young to start planning for the future.
Many life insurance companies actually offer the most affordable premium rates to young, healthy people. The older that policyholders get, the greater the risk of insuring them, so their rates increase.
Many insurance policies do not have minimum age requirements, but policyholders are usually married with dependents and own homes. Even so, it’s still possible to start policies for children, teens, or young adults, provided that they have people who depend on them.
Reasons to Get Life Insurance
The main reason why people seek life insurance is to support dependents after their death. Regardless of age or income, if you are the sole breadwinner in a home full of financially dependent individuals (due to age, chronic illness, etc.), life insurance is extremely important. Without it, these dependents would most likely be unable to support themselves without your income.
A change in your lifestyle or habits is another reason to consider life insurance. Smoking, weight gain, or a recent medical diagnosis are all reasons to protect your family members this way. Similarly, recent job loss or drop in income is another cause for concern if you care for dependents.
Business partners may take out a joint policy to pay for a joint debt. When you die, you will not leave your partner with the remaining debt. If you pay a mortgage, protect your lender from having to deal with unpaid debts with a similar provision in your policy.
Insurance companies want to ensure that you do not waste money — yours or theirs. Do not take out more than what you will need, and if you find that you no longer need life insurance later in life, you can cash out through services like Beco Life Insurance Settlements. Either way, your policy will provide peace of mind to yourself and family members.
When a situation in life changes, you need the reassurance that your family is financially protected. Life insurance is available to anyone who wants to plan for the future, whether the policyholders are young college students or elderly retirees. Get the facts about this type of insurance and know your coverage options.