Most young people think that they don’t need life insurance. After all, mortality is far away from 20- and 30-somethings. There are, however, certain cases when young people do need life insurance to guard against the unexpected. Life insurance doesn’t have to be expensive. Term life insurance provides coverage for a limited period of time (for example, 10 years, 20 years or 30 years) and is one of the most cost-effective ways to purchase life insurance. Here are five situations in which you should consider having life insurance.
- You have parents who are depending on your income. We typically don’t think of young, single people as folks with dependents. But if you are the main source of support for your parents, siblings or relatives, you need to get life insurance as much as the sole earner who is supporting a spouse and three kids.
- You have a partner or spouse who is depending on your income, especially if you have a home. Many times a young couple purchases a home based on both of their incomes. A life insurance policy could help provide mortgage protection. Even if the life insurance isn’t big enough to pay off the entire mortgage, the money could give the surviving partner time to figure out the best next step forward. Or, if you are supporting your partner through school, the life insurance proceeds could help ensure that your partner can continue with his or her education.
- You want to give your partner or spouse time to deal with their grief without worrying about finances. Think about how devastated your partner would be if you died. Money can’t bring you back, but it can help provide a cushion for your partner.
- You want to have money set aside for funerals, especially if you would like a burial. According to the National Funeral Directors Association, the average cost of a funeral was $6,650 in 2009. This cost does not include cemetery or headstones. If you want to be buried, a plot of land can cost up to tens of thousands of dollars. The cost of cremation is lower at $1,000, according to the National Cremation Research Council.
- You are able to buy affordable term life insurance. Typically, a $25,000-$250,000 term life insurance is very affordable for young healthy folks. Many companies also offer free or discounted life insurance coverage.
A life insurance policy will hopefully be something a young person never has to use (knock on wood!), but it does provide protection — and should provide comfort — to loved ones in case of an unexpected tragedy.
Well Heeled is a guest blogger from WellHeeledBlog. In exchange for sharing this content, the Allstate Community has compensated her via cash payment.
This article originally appeared on the Allstate Blog.