7 Great Reasons To Get Life Insurance Fresh Out Of College
For many students fresh out of college, getting a life insurance policy is the furthest thing from their minds. After all, you’re young and healthy, and chances are pretty good you don’t have a spouse or children. You may not even have any debt depending on your major and how many scholarships and/or grants you had throughout your college career. Nevertheless, we definitely believe you’re doing yourself a disservice if you don’t at least consider picking up a policy at this time in your life. Why? Here are seven reasons:
One: It’s cheaper than it will ever be.
Whole life insurance policies that build cash value get a lot more expensive with age and the developing health issues that often go with it. For the average college student, graduation marks one of the healthiest days of life, and it’s a prime time for locking in the best rate for the life of the policy.
Two: Each day, we all gamble with our health.
At 34, I have a lot more wrong with me than I did at 22. The same will probably be true for you — and even if it isn’t, you’ll still find yourself in a higher risk pool. Every day that goes by where you don’t have the coverage you need, means that you’ll pay more later.
Three: Cash value makes for a nice, stable investment (though it shouldn’t be your only one).
One of the best investments I’ve ever made is a whole life insurance policy. For starters, it saves me money on my other coverages — hello discounts! — and that’s money I can place in other investments. But what I like most is the cash value. Each month, the premium I pay is actually going towards something that I can’t easily access. In that sense, it’s superior to the savings account at my bank. And while the policy I have probably isn’t enough to retire on, this feature of it can definitely provide stability during uncertain times.
Four: You get to plan for your future family.
You may not have a family now, but most people don’t spend their entire lives alone. Translation: you will have a family in all likelihood, and you can buy them a policy that does a lot more good for them now than if you waited until you met the right person and had kids.
Five: If you don’t have a close beneficiary, you can leave it to a favorite charity.
We all care about something, even if we’re at a place where there are no significant others, no kids, and no close family members. Dig deep and determine what is important to you. Then, find a charity that supports that cause. You can always change it later, if you start a family.
Six: It frees you up to look at more aggressive investments.
If you know that your life insurance policy is going to provide for your loved ones in the event of your death, then that means the money you do save can be directed toward more aggressive and lucrative investments. That’s not to say you should find a risky stock; but you should examine stable investments like mutual funds with a track record of long-term growth. Ninety-nine percent of the time, you’ll be better off sinking your investment funds in that than a low-interest money market account.
Seven: It can take care of funeral and other expenses in the event of your death.
If you die and leave your loved ones with a mountain of debt — think: student or personal loans, for instance — those you leave behind can focus on the grieving process instead of dealing with your debt collectors.
There are a lot of great investments where you can invest your money, but many of them do have a share of risk with which you may not be comfortable. Life insurance, however, is a certainty — one that can solve all your money worries as it relates to the people closest to you (or the close ones you’ve yet to meet). College may not seem like the right time to buy a policy when there is so much undecided about your future, but doing so provides a support beam of security as you live your life, and it can save you money in the process.