Some people make the mistake that life assurance is only for middle aged and older people, who are starting to question their mortality. In fact it is viewed only as a necessary evil by younger people, many of whom only take out cover when they are forced to, for example when getting a mortgage.
But actually it makes a huge amount of sense to get life cover in place while you are still young, for a number of reasons
Life cover is cheaper (for the duration of the policy) for younger people
Life cover gets progressively more expensive as you age. Younger people get cover at the lowest premiums and under most term assurance policies, this price is then locked in for the full duration of the policy. So yes, while there is a small premium to be paid for cover (as opposed to no premium payable if you don’t have any cover), this premium then remains at this same level out into the future.
You’re healthier and more likely to get better terms (for the duration of the policy)
Young people are generally healthier than older people. That’s a simple fact. And because they are healthier and may not as yet have suffered medical conditions that they are destined to face in later life, young people find it easier to access life assurance cover at the lowest rates. If you are unfortunate enough to be diagnosed with any sort of a serious condition in later life, you can expect that your life assurance cover will be more expensive as a result of loadings to reflect your medical condition, as well as the fact that you are older. So getting life cover in place while you are young and healthy will help you avoid premium loadings.
You’ve less negative family history to impact the cost
Similar to the last point, another factor that impacts access to and the cost of life assurance cover is family history. If for example there is a family history of chronic illnesses, this will negatively affect your life assurance policy. Younger people have younger (and generally more healthy) parents. This means a more positive family medical history, and as a result more favourable policy terms.
You can protect yourself against future policy changes
Life assurance policies evolve in line with changing circumstances. When we think back to the likes of the HIV and AIDS epidemic of the 1980’s, one of the immediate impacts of this was a 15% hike in the cost of life assurance policies. Of course this hike only applied to new policies taken out from that point forwards. So getting in at a young age protects you against such future events. Of course if premium rates reduce (which they have also done from time to time), there is nothing to stop you switching to a new, cheaper policy. So you can win both ways!
Lots of reasons to consider life assurance in your early years....