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Life Insurance for 20 to 30 Year Olds

In your 20s, you’re probably familiar with insurance policies, having considered and bought car insurance, travel insurance, health insurance – and maybe even home insurance. But, while you’ve kick-started your career, planned your next holiday or looked to buy your first house, it’s unlikely you’ve considered buying Life Insurance.

Why would you? There might not be a lot you think you need to cover and you may have no dependants, you’re young and healthy and it is unlikely you’ll become permanently disabled or pass away any time soon.

A Life Insurance policy is integral to building a long-term wealth strategy. Buying a policy now might not seem completely necessary, but there are a number of key benefits to buying your insurance while you’re young and healthy and might not think you need it.

Forms of Life Insurance

  • Life Cover: This will provide a lump sum payout to your family or nominated beneficiaries in the event (however unlikely) of your death.
  • TPD Insurance: Total and Permanent Disability insurance (TPD) will provide you a lump sum payout in if you are injured and become permanently disabled. This will help pay for medical costs and rehabilitation and to settle any debts you may have.
  • Trauma Insurance: Trauma insurance is also known as critical illness insurance. This type of insurance will pay out a lump sum if you’re diagnosed with a serious medical condition.
  • Income Protection Insurance: Income Protection will provide you with regular payments of up to 75% of your regular income if you’re injured or become ill and are unable to work over a period of time.

You can also buy your insurance policy as a couple which will offer a five to ten percent discount on your premiums, and will provide protection if one of you is no longer able to contribute to a joint income, or does not work and relies on the other’s income.

Personal benefits

While you may not yet have a family of your own, you probably do have student debts, a loan to buy your first car, or credit card debts which have built over the years. In the event of your death or a serious injury, it’s your immediate family who will be left to pick up the pieces, all while trying to cover the cost of your health care, or worse, while grieving their loss.

A Life Insurance policy will also help cover the costs of your funeral to ensure your family isn’t left out of pocket.

Financial benefits

To move away from thoughts of your own mortality, there are some significant and generally unknown financial benefits of buying Life Insurance young.

When you’re young and healthy your premiums will be much cheaper as you are at a low risk of death or injury. It will cost you less in the long run if you buy young. You can select a lower premium level that you’ll keep for life, bar your insurers’ price increases due to inflation. Click here for more on level vs stepped premiums.

Life Insurance will also improve your credit rating when you’re taking out a loan and can help you secure a mortgage for your first home.

Starting a business?

If you’re kicking off your career as an entrepreneur and starting up your own business, you may also need to consider Business Expenses Insurance to protect your business in case you become ill and are unable to work. Business Expenses Insurance can cover up to 100% of your business costs to keep your business running while you’re unable to work.

Find out more about insurance for your business.

Talk to a Wealth Smart expert today!

One of Wealth Smart’s qualified and experienced financial advisors will be able to help you discuss your options when buying a Life Insurance policy in your twenties. Our advisors can impart their knowledge, while helping you find the right policy for you at the best price!

Page last updated: January 22, 2015