Life insurance question? -

If someone were to get life insurance in their twenties, how would that benefit them later in life when their old? Life insurance is basically financial protection for loved ones. If a person in good health buys a 25- or 30-year term life insurance in their twenties, it will most likely be cheaper than if they were to buy in their thirties or forties. Age is not the only factor in cost -- life style, family, stability, health or other risk factors are considered as well. Don't even think about whole life insurance -- you will almost certainly get better returns if you invest the cost difference between whole life and term life in an index fund over a 25- or 30-year period. To be honest, when speaking of life insurance, you are thinking about your loved ones. These are the people you want to help for the near future- pay off house, debts, and college for kids. As each of these milestones are met, you can drop that amount from the face amount, thereby paying less each month in premiums. You take that savings and put it into a well managed mutual fund. By doing so, you are preparing yourself for the distant future- when you retire. Life insurance should be called income insurance because that is what you are actually protecting. Your agent should be looking out for you and your family's benefit and not his own pocket, ie commission. If he/she can't place you into a better future than another agent could, don't use that first one. Most people buy term insurance. It's good for one year only. The policy *might* have a clause giving you the right to renew it each year. There is also Whole Life. It's partly insurance and partly an investment vehicle. I don't buy insurance to get an investment so you can guess my opinion of it. Life insurance is not intended for your benefit. It is for the benefit of those that depend on you for support. Well I have to say, if you have a need for it ( married,children, mortgage, debts, and little money), because right now your young, many responsiblities, and little money it is to protect your family from the loss of your income, not as a way to leave your family money. Stocks, mutual funds, and real estate can do that for you. Also term most term policies do renew annually, some renew or convert to whole life or permanent life after 3 - 10 years, the term policies I provide for my clients do NOT convert to anything other than another term policy if needed and the premium is guarteed level for the whole term not for a short period of time. The policy I own is a 25 level term that the premium is level for 25 years NOT 1 - 10 years. When you get older as long as you invest money into your short term and long term investments you may not need as much or any coverage at ALL. Wrong question. The ACTUAL question should be, what are my financial needs and goals? Which type of life insurance policy fits these needs and goals? Just like you don't buy a table saw at Home Depot now, in case you might need it 30 years from now . . . you don't buy the policy now, in hopes that 30 years from now, you'll have some financial goal it might meet. Pick the goal first, THEN find the best product to acheive the goal at the lowest cost. **btw, term is NOT only good for one year. You can pick the length of the policy when you first buy it. *I* have a 20 year term policy. And I think 1 year term is kinda dumb. After all, is your GOAL going to disappear in one year? Likely not.** It is very beneficial for someone in their twenties to purchase life insurance, since the premiums will be much lower than if you wait until you are older. Premiums escalate in relation to the age of person at time of purchase. The best way to buy life insurance at your age is to buy a ROP Term policy (Return of Premium). Let's say you pick a ROP Term for 30 years and at the end of the 30 years you are still living, you would receive a lump payment for the premiums paid over those 30 years. So basically you would be getting your money back to do whatever you wanted to do with the funds. I offer this to all my younger clients who are looking for an alternative to basic term insurance. Life insurance protects assets or creates assets for the future. Depending on the policy and your needs, you can get money back in the future or have money go to anyone you want. This is true if you die or even if you live long enough to outlive your policy. There is a HUGE benifit. Get a whole-life plan when you are young and the monthly payment is super low, and you will reap the savings later in life.