4 Reasons to Get Permanent Life Insurance When You’re Young

4 Reasons to Get Permanent Life Insurance When You’re Young

Many people believe that permanent life insurance is only for older adults. After all, young people are less likely to die, and they may not think they need life insurance coverage for their beneficiaries.

Permanent Life Insurance

Permanent Life Insurance

But many people can benefit from getting permanent life insurance earlier in life. By going this route, they can cover their beneficiaries for their entire life and build more wealth earlier on while locking in lower premiums. Here are some advantages to taking out a permanent life insurance policy while you’re young:

1. Lock in lower premiums

The older you get, the more likely you will pass away from either old age or health problems. Younger people are less likely to die, which means that they can qualify for lower premiums on permanent life insurance. And many permanent life policies let you lock in those premiums, helping you save money on coverage once you get older.

2. Provide guaranteed coverage to loved ones

Term life insurance policies eventually end, meaning you’ll have to go through the life insurance shopping process again if you want to continue providing financial protection for your loved ones. On the other hand, your permanent life policy lasts forever once you get it. You’ll never have to worry about purchasing coverage again, as long as you keep paying your premiums.

3. Potentially grow your wealth faster

Part of each permanent life insurance premium you pay goes into a growth component called the cash value. This cash value grows tax-deferred at a specific rate that depends on the type of permanent policy you have. By getting a policy early, you have more time to take advantage of compound interest. So, you can potentially create even more wealth.

4. Protect against emergencies

Older individuals tend to have multiple income streams, such as Social Security and retirement accounts. But when you’re younger, your job may be your main and only source of income. If you lose your job, your permanent life insurance policy’s cash value component can provide you with a safety net.

Once the cash value grows large enough, you may be able to withdraw some of it or borrow from it with no credit check at a low interest rate and pay the loan back at your leisure. Some policies let you pay your premiums with your cash value as well. And if you ever decide to cancel your policy, you can get the cash value back minus any surrender charges.

Regardless of how you use your cash value, it can help you cover emergency or essential expenses in the event of an unexpected financial situation — whether that’s a job loss, car accident, or something else.

Get lifelong coverage early

Although many think permanent life insurance is only for older adults, it can make sense when you’re young — especially if you have dependents, like children. Getting coverage while young helps you lock in lower premiums while guaranteeing lifelong coverage for your dependents. Plus, you can build wealth and even create an extra safety net while you’re still alive. Make sure to evaluate your circumstances and shop around before taking out a permanent life insurance policy.