10 Reasons why you should invest in Life Insurance while you're young

10 Reasons why you should invest in Life Insurance while you're young

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Young adults don’t have life insurance at the top of their priority list, which is entirely understandable. After all, when you don’t have kids or a spouse, insurance doesn’t seem like a thing you need in your life. But is life insurance a product only for those with dependents? Not at all! There are many reasons why a single and childless adult should purchase an insurance plan. From getting prepared for the future to guaranteeing that outstanding debts are covered, every young adult can benefit from insurance protection.

As time passes, Canadians seem to understand this need. According to a report from LIMRA, “almost 40 percent of life insurance buyers in Canada are younger than 35”. As many understand, having a life insurance policy is a valuable building block for a responsible financial future.

You will also start to grasp how having an insurance plan is part of having a strong financial foundation - and how smart it is to purchase it while you are healthy. Buying personal insurance at a young age generally means you are getting the lowest possible premiums, which is, by itself, an excellent reason for you to consider getting insured.

And if you need more, don’t miss this list of benefits we have gathered for you:

1. A way to protect your future dependents

You might not have dependents now, but who knows what can happen in a few years? Look ahead. Sooner than what you expect, you might as well be married or about to start a family. Investing in life insurance now means you will have protection in place for your future spouse and children. Considering that most Canadian families can’t keep their normal lifestyle if the breadwinner unexpectedly dies or suffers an accident/illness, this is an essential tool to have the necessary protection in place. After all, the last thing you want is to leave your loved ones in a precarious financial position.

And if you know that family life isn’t for you, think about this: there will always be someone who will depend on you. Take your parents, for example. If they don’t have adequate savings, you may eventually be responsible for their medical care and final expenses. The same may even apply to your siblings or a good friend. The truth is that, in life, there is always someone who relies on us. And the fact that you can’t identify that person now doesn’t mean that things won’t change in the future.

2. Taking responsibility for your debts

You don’t want your loved ones (including your parents or siblings) to be burdened with your debts. If you have an outstanding balance on your credit cards, investing in a life insurance policy might be the best financial move to spare your family from financial stress.
For young adults, there are many sources of debt to consider. Let’s think of college. According to Statistics Canada, a college graduate owes, on average, $14,200 at the time of graduation. Student loan debt is a huge concern for so many young Canadians, especially those just starting out after college. Life insurance is, in this situation, a great help to ease some of that concern.

If you have considerable student debt, having an insurance policy in place will allow you to spare the people you care about from having to deal with it if something unexpected happens.
And this applies to all sorts of debts, including mortgage debt, vehicle debt, and credit card debts. So, if you consider these scenarios, you will surely agree that you might need life insurance as much as someone raising a family.

3. Covering your mortgage payments

If you recently bought a house or are considering doing so soon, you are undoubtedly worried about mortgage payments. After all, this is the sort of financial step that needs a lot of planning and organization, not to mention stability. In your research, mortgage insurance is something that you will inevitably come across. As the name implies, mortgage insurance is a type of policy that pays off your mortgage's balance if you pass away. This insurance’s death benefit goes towards your lender, which means your protection is over once you finish paying the mortgage. If this sounds a bit unreasonable, you might want to consider another option: life insurance.

With a term or whole life insurance plan, you can keep the mortgage payments protected in a simpler (and definitely better) way. Regardless of the remaining balance of your loan, you can keep your loved one's stability and lifestyle protected. No matter what happens, your family will be able to keep the home in which you invested so much. Isn't it way better than covering your lender's interests?

4. Protecting your children and their future

Purchasing an insurance plan, besides being an important financial decision, is also an emotional one. That is because when you buy a life insurance policy, you are not actually buying it for yourself, but rather for the people you love. That is the ultimate goal of life insurance: to make sure that the people you care about will always be financially safe, even in your absence. Especially if you have young children, this can be an essential tool to protect their economic well-being. But more importantly, it is the best way you have to guarantee that they will achieve their life goals.

Think about their higher education, for example. The cost of one year of tuition, fees, and accommodation at a four-year university can cost as much as $20,000. Would your family be able to afford these prices if they lose your source of income? Hardly. This is where life insurance comes into play. Besides helping your loved ones with their immediate needs, it can also help ensure their future happiness. Summing up, if you want to give them all the opportunities they deserve, protecting your life with an insurance policy is an absolute must.

5. An opportunity to lock-in the best rates

Several factors affect life insurance premiums, but your age and health are probably the two key determinants. Life insurance costs tend to go up with age, both for term and whole life plans. Why does it work like that? Because every birthday puts you one year closer to your life expectancy and, as such, you become more expensive to insure. Besides, the older you get, the more likely it is for you to develop health issues that are hard to insure (such as high blood pressure, diabetes, or heart diseases).

As such, the younger you are when you buy your insurance policy, the cheaper your premiums will be. And the best part? If you apply for a term life policy, they will also be locked in until your term’s end. Once the term ends, you will have the possibility to convert your term plan into a whole life policy or to renew the term.
Next time you think you are too healthy to need life insurance, look at it the other way around: the fact that you are so healthy will make it easier for you to get the right protection in place. Isn’t this good enough reason to invest in life insurance while you are young?

6. Getting coverage faster and smoothly 

Did you know that it can take over six weeks for your insurance plan to come into effect? Considering that many insurance companies require extensive paperwork, medical exams, and even face-to-face appointments to give you coverage, it might take longer than expected to get a policy. And if you consider the current circumstances, with the COVID-19 pandemic slowing down and altering our daily routines, the whole process can be even more delayed.

However, if you are young and healthy, the application process can be shorter and more straightforward. Depending on the product you choose and the process involved, you can receive your insurance policy on the same day you apply.
Even if you believe that you don’t need insurance today, as your life grows and changes, so do your needs. The fact that you can get a reliable protection plan today, with no struggle or obstacles, is something you should take advantage of while you can.

7. Get comprehensive coverage for life

By taking out life insurance when you're young, you can get additional coverage with more comprehensive services. You can have life insurance coupled with critical illness or disability insurance. When you're young, buying life insurance protects your savings. The benefit from one of these policies will indeed replace your income for your loved ones and protect your investments.
In the event of a critical illness, you won't have to draw on your capital, as the insurer will pay a benefit to you each month. And your parents will not have to assume about your health problems.
Why take out such comprehensive coverage at your age? As with life insurance, you can benefit from a lower price!

8. The premiums remain fixed for life

One of the advantages of buying life insurance when you're young is that the premiums can be fixed. Once you purchase the life insurance policy, your monthly premium will be the same: no nasty surprise at the end of the month. The cost stays the same, and if you choose a long-term, such as Term 30 or Term 100, you can get coverage for all your future projects.

9. You keep the choice of convertibility

You don't know what your future will look like: you may have several home loans to pay off or credit card debt that runs from month to month. The more projects you have, the more debt you'll have and the more coverage you'll need to cover it all. When your term policy expires (if you have a 10, 20 or 30-year term), you will have the option to convert to permanent coverage.

10. Proof of financial maturity

Suppose you have plans to invest in real estate, increase your wealth, or start a business. In that case, a life insurance policy should be part of your business plan when you ask your banker for a line of credit. A life insurance policy proves that you have thought about and planned for your future. It shows certain insurability and financial expertise. In short, you inspire confidence, which will give your banker an excellent reason to do business with you.
The earlier your coverage is in place, the more serene life is. People who are waiting for retirement are shocked by the premium amount. Don't make the same mistake.


Term life insurance: the perfect option for the young and healthy

Investing in life insurance while you are young and healthy can be a savvy financial move. However, given the abundance of insurance products available nowadays, finding the right coverage for your financial situation might seem a bit tricky. Our suggestion? Start by exploring term life insurance policies.

When you are young and starting your career, chances are you do not have a lot of extra income. In these circumstances, term life insurance is the best option, as it provides an affordable way for young adults to get the protection they need. Coverage is usually available in terms of 10 to 30 years (although it is possible to get coverage for as little as two years and as much as 100), and payments can be split into affordable monthly premiums.

As for the benefit, it works similarly to a whole life policy. If you have term life insurance and pass away, your chosen beneficiaries – husband, wife, children, other family members, or friends – will receive a lump sum payment that they can use however they find appropriate. This payment (known as the death benefit) is generally a tax-free payout. It means that, regardless of the policy’s size, your beneficiary won’t have to report life insurance proceeds as taxable income on their Canadian tax return. As for the money, it can serve any purpose that your loved ones find necessary, from essential expenses to college tuition.

How TermLite can provide you with the perfect coverage

When it comes to choosing a life insurance policy, you have to consider many factors, from your current financial situation to your likely future needs. At TermLite, we can provide a personalized plan for your unique circumstances. You can choose to be protected for 10, 20, 30, or 100 years and apply for a benefit as high as $1,000,000. The healthier and younger you are, the more chances you have to lock-in lower premiums.

The application process is quite easy and straightforward, as we don’t require medical exams or face-to-face meetings. To qualify for our insurance plans, we will only consider your age, gender, and smoking status and require a short health questionnaire. Once your term ends, if you wish to renew your policy, you can do so yearly without a medical exam.

In short, TermLite is making term life insurance more accessible than ever, so that young Canadians like yourself can get financially protected with little effort. Our mission is to make life insurance straightforward and hassle-free. If you are interested, you can learn more about our tailor-made products. To request a free quote, fill out this quick form. After assessing your situation, our friendly advisors will get in touch with you soon to discuss your coverage options.


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