Do you think everyone needs life insurance?

Question

I am 24 years old and someone I know wants me to get life insurance from them but it is only a 20 year term policy what do you think is the propability that I will actually die in between then and now?

Answer 1

I don't think people who are single and has no one dependant on their income shouldn't get life insurance. Instead, they should be using the money and save it for retirement or for some other goals such as buying a home. The only reason why a person who is single should buy life insurance is if he/she is going to sell it to other people. This shows you believe in the life insurance product you have and it shows people that you know what you are talking about and they probably want the same life insurance you have.

However, if you have a family or where people such as kids are dependant on your income, then you do need life insurance. Approximately 40% of American families only have life insurance and most of these families are under-insured. The other 60% of families are taking a high risk that they will live a long time and their kids will be fine.

As to answer your final question of the probability of you dying in the next 20 years, it's probably 1 in a million. But stuff do happens.

Answer 2

Actually, the truth is, the younger you buy it, the better off you are, generally speaking.

Wait too long and you may very well not qualify at all, or, if you do, you can be sure you'll pay a lot more for it.

On the other hand, a 20-year term policy may not be the best choice for you. At 24, it would run out just about the time you're likely (statistically speaking) to start really needing it. There are other options, though.

Most companies offer a 30-year term policy and some also offer something called a Universal policy. If you choose the right Universal policy, it acts like a term policy that never ends. (In other words, it doesn't build cash value, like a whole life policy would, but it does stay in force past age 100 -- depending on the details, of course.)

Then there's the option of whole life. And while some people feel that's a real waste, it does build cash value. And there are some options a lot of people don't know about. Like buying a small policy now (say $25k to cover the basics, just in case) and adding a rider for guaranteed issue of additional coverage. Not all companies offer that option, but it's usually a very good deal because it protects you from having to qualify for insurance again as you age.

I notice that there's a lot of focus on having assets to protect, or a family to take care of before you buy life insurance. While that's certainly a larger concern as you age, everyone will eventually need to pay for what's termed as "final expenses." That's a nice way of saying that there will ALWAYS be expenses associated with death (and the funeral home, cemetary and/or crematorium are just the least of it -- it's also likely that there will be medical bills and taxes to consider.) And terrible things DO happen to young folks, too.

Best advice: find an agent who will actually take the time to listen to you and help you figure out what's right for your situation.

Answer 3

Life insurance will cover bills that have been unpaid, funeral expenses and other financial burdens that you will not have to leave to your loved ones to pay for. Also if you lose hearing and sight, or lose a leg or an arm, for an example, you could be compensated, depending on your policy.

There are many different life insurance policies available. If you are able to get onto a life insurance policy, shop around and find something you are comfortable with. There are many people who are unable to receive life insurance for various medical reasons. The older you are the harder it will be to receive it.

I have a medical condition called dwarfism and my husband has a congenital heart condition. With a group plan I was able to get a policy on each of us that we will be able to take with us if and when I decide to leave the organization I work for. Without this, neither one of us would be able to get life insurance alone. We are 24 and 26 years old.

You never know what will happen tomorrow or even 20 years from now. I would talk to a Representative and see if there is a roll-over policy after the 20 years have expired. Ask all the questions you can think of and shop around.

Answer 4

You do NOT need life insurance unless and until you have a spouse and/or children that rely on your income. The only reason to pay for life insurance is to replace your income when/if you die.

Even if you have a wife, if you are both young and working, you still don't really need life insurance since the other one will be fine without you (unless you have a mortgage together that one spouse can't pay on their income alone; in which case get a policy that would pay enough to pay off the house).

Who is going to get your life insurance proceeds if you buy a policy and then die? Do they need the money? Probably NOT if you are 24. Also, most employers include a limited life insurance policy as part of your benefits. You may already have some and not even know it.

Answer 5

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RE Do you think everyone needs life insurance?

I am 24 years old and someone I know wants me to get life insurance from them but it is only a 20 year term policy what do you think is the propability that I will actually die in between then and now?

Answer 6

Rather than a term, you may be better served to pay a little more and get a whole life insurance policy. This way it will earn cash value and, if you become uninsurable during the next umpteen years, and it is guaranteed renewable, then you'll have coverage. The cash value also has a savings feature that will allow you to borrow against it, and since you're young and probably in great health, it's the best time to purchase.

Answer 7

Of course not!

The probability that you would die is VERY low, and so is the premium for that time frame.

What do you want the insurance to DO for you? Are you leaving any kids behind? If not, well, you don't NEED the insurance!!!

Answer 8

First, let me agree with Rich, that at your age, long term disability is a greater liklihood, and the cost at your age would be incredibly low. Having said that, regarding life insurance ....

You may not need insurance, but you could.

Contrary to "Do the Right Thing" who says your odds of dying in the next 20 years are 1 in a million, according to the Commissioners 2001 Standard Ordinary Mortality Table, your odds are actually about 5,996 in 1 million, beginning at age 24 over a 20-year span. http://www.aldoi.gov/PDF/Consumers/MortalityTable2001.pdf

It's true that your odds of dying at 24 are less than at 54; and, many times employers will have a reasonable amount of life insurance in your group coverage. But, you still might want to jot down some info or ask a Certified Financial Consultant (ChFC) or Certified Financial Planner (CFP) about it.

Even if you are not married and don't have children, is your group life insurance enough to pay for your final expenses and debts you leave behind? A funeral may cost $8,000 - $10,000, and there are usually other costs at death, so someone might need to pony up around 20 - 25 thousand dollars for those costs.

Even though creditors can't collect from a dead person, are your parents or other family members co-signers on any of your debts?

Do you have a favorite charitable cause or church you want to leave a legacy to?

Do you have a favorite niece or nephew whose education you want to guarantee?

Now, I'm not pushing insurance for young singles, but there are good reasons some do carry it. For example, if you have debts, or are buying property, do you want to ensure that it will pass clean to your future spouse? This is more important if you're in a serious relationship and think marriage might occur in the next few years.

One reason some young folks buy insurance is to "guarantee their insurability." What's that? Well, now you're in good health and can buy insurance for a really low cost. Even though you may not *NEED* a large amount of insurance, if you buy it now, that cost can never go up on the policy you get now. Even if, at age 35, you find that you have an incurable disease, or other health problems that would prevent you from getting insurance - or at least, from getting it at a decent price - you can keep the policy you already have at the price you paid while young and in good health. That is one plus for permanent versus term; but, even term would be a guarantee that you'll have insurance for the term period, even if your health changes.

Let's say you have $50,000 of group insurance at work, and at age 30, after you're married and have two beautiful babies, you're hang gliding and suffer a severe injury, but live. You start thinking, "man, I need to man up and make sure my wife and babies don't suffer financially if I die. I have a family and a mortgage, so I probably need about $250,000," but the company says, 'well, we MIGHT be able to issue you a policy for $200 per month premium, but with your lingering health problems we may not be able to issue it at all.'

With a term policy you got at 24 which is guaranteed renewable AND convertable (and for which you probably only paid about $15 - $20 per month for $250K), then you could be guaranteed that at 44 you can renew the term at the standard cost for age 44; or, if you chose, you could convert it to a permanent policy any time before age 44 (some companies have a shorter conversion period), WITHOUT MEDICAL UNDERWRITING.

Now, again, I'm not pushing that everyone needs a large amount of insurance. Circumstance differ. I think everyone needs *SOME* insurance, if just to pay final expenses and not leave a burden on parents or family. But that could be covered by your group life policy at work. What I am saying is that there are legitimate reasons that young healthy people like yourself do buy a larger policy. Whether term or permanent, it is worth your time to seriously consider what your needs might be, not just now, but in the foreseeable future.

JMHO, VFAH

Answer 9

Life insurance with cash value don't pay out cash value when you die! Sure you get face amount that is reduced by any loans and missed premiums, but you lose all the cash value! They say its a good way to build savings! How is that so if you lose it all and it doesn't go to anyone when you die? People say you can borrow it. Why do I want to borrow my own money that I paid for? Cash value = scams!

Answer 10

Most people who buy term life insurance never get a penny from it (or their beneficiary either) because they don't die during the term. Life insurance is an expense...not an asset. It should never be purchased unless there is a specific need for it.