Age is just a number … right? But when it comes to buying a life insurance policy as a young adult, it can play to your advantage in a big way.
When you’re a young adult, buying life insurance may not be at the top of your to-do list. But knowing your loved ones are financially protected is likely worth the cost. Generally, life insurance is less expensive if purchased when you’re younger and healthier – it could even cost less than your daily latte. The best life insurance policy for young adults can vary based on your life insurance goals. We take a closer look at two coverage options: term life and whole life.
Term Life Coverage
A simple way to think about term life insurance is to view it as a temporary coverage option. With this type of coverage, your premiums remain fixed for the term (a set number of years).
A term life policy is typically a good option for life insurance for adults under 30 because of the generally low premium. When you’re young, you may not have a lot of extra income. This option creates an affordable way to get the protection you need for a set number of years. Term life insurance is often a good option for young families because it can offer protection for your children as they grow up, giving you a peace of mind. The death benefit can be used to help replace your income for your family, pay off your mortgage and send your children to college.
Additionally, you can generally opt to convert your term policy to whole life insurance, giving you coverage for life.
Whole Life Coverage
A whole life insurance policy is a permanent coverage option that guarantees you’ll have coverage for life. Whole life insurance premiums are generally higher than term life insurance premiums, but since your coverage is guaranteed for life you won’t have to worry about the premiums increasing as you grow older. Whole life insurance is a good option to consider as your salary increases and are looking for a permanent coverage option.
As you pay your premiums on your whole life policy, it will accumulate a cash value. This cash value grows on a tax-deferred basis, which can allow your funds to grow faster. Depending on the type of policy, you may be able to borrow against the cash value for future financial needs like starting a business, buying a home, or supplementing your retirement income.¹
We make insurance simple®.
Whether you’re married, have children or are just starting out — life insurance is a smart move, but you may not know what type of policy to purchase. Our Farm Bureau agents make insurance simple, so you can tackle life’s adventures with peace of mind. Your local Farm Bureau agent can help you find the right type and determine the amount of coverage you need.
¹Withdrawals may be subject to fees and/or considered a taxable event. Any loans from the policy’s accumulated value will reduce the accumulated value and death benefit if the borrowed funds, plus interest, are not repaid by the time of your death.