Reasons to get life insurance from a young age
Many young people do not give life insurance a second thought, but there are some benefits of getting cover earlier rather than later.
Even if you are young and single, the peace of mind life insurance can give you is priceless.
It means if the worst happens, your family won't need to fork out for funeral costs or pay any bills you might leave behind, such as credit card debt or mortgage repayments.
If you have a family of your own, life insurance will mean you no longer need to stress about finances if something goes wrong.
There are a few options to choose from if you do decide to purchase life insurance, as the various policies give you a different level of cover.
What does life insurance cover?
You may want to have full cover, which will provide your family with financial help if you can no longer support them as well as financing your funeral.
Full cover will also guarantee you help if you become terminally ill or suffer from an accidental injury.
Often if you are young, you will not be required to undergo any medical or blood tests but you may have to fill out a medical questionnaire.
Another option to consider is trauma cover, which will help your family care for you if you suffer from a heart attack or stroke.
Similar policies are available to help if you develop a terminal or chronic illness, or permanent disability.
What to look for
Your needs may vary depending on your current financial and familial situation. If you are planning on having kids in the next few years, you will want to take this into consideration.
When choosing a policy make sure it will provide you with the right amount of cover to give you or your family enough money to meet your debt repayments and bills, with enough left over to maintain your lifestyle.
Term of life or whole of life insurance?
Term of life insurance policies may only cover you for a prescribed length of time, say 25 years, while whole of life policies last as long as you want, providing you pay the premiums.
Whole of life policies sometimes include a savings plan and may actually cost you more in the long run, because they can also include commission from the agent.
Do your research and make sure you have selected the best product for you at the best price.
Don't be afraid to ask the insurer questions about what is actually covered under the policy - you need to make a fully informed decision.
Provide accurate information
If you do not give insurers correct information when you are choosing your life insurance policy, you may end up with a policy that does not match your requirements.
Providing the right details and being careful not to omit anything will mean you are covered for all contingencies.
Benefits of getting insurance before you reach 30
If you plan to get life insurance somewhere down the track, you are better off getting it sooner.
There is a government incentive to encourage you to take out insurance before your 30th birthday - the Lifetime Health Cover scheme.
If you decide to get insurance after you celebrate this milestone age, premiums will be loaded by 2 per cent every year for the next ten years.
Younger people are also less likely to suffer from pre-existing medical conditions that can make premiums skyrocket. It may be better to get your insurance covered while you're healthy so you won't be surprised by a big bill.
Benefits for young singles
Getting your life insurance sorted out while you're young and healthy clearly has its benefits.
Singles may think life insurance is only suitable for people with families but setting it up while you are footloose and fancy-free means you will be prepared for the worst.
It means you can still fend for yourself and won't need to rely on your family or the government if something were to happen to you.
Accidents and illnesses strike when they are least expected and it is best to make sure you are provided for.
Benefits for young families
Parents always want to do the best for their kids and one way you can ensure their future is secure is to set up life insurance.
You never know what will happen and you could be struck down by cancer, a heart attack or have a car accident at any point in time.
Being one income down can affect many families but life insurance can take care of your finances in the worst case scenario, allowing your family to stay in their home by covering your rent or mortgage.
Life insurance may also cover childcare costs if you are unable to take care of your kids.