5 Reasons To Purchase Life Insurance At A Young Age

Cash-Value

Universal life and whole life policies provide cash-value accumulation. With these permanent life insurance policies, buying young allows for cheaper premiums and increased cash-value accumulation, as cash savings values take years to grow. Thus, older life insurance buyers see very little accumulation compared to younger buyers. Cash values provide many benefits, including tax-advantaged income and savings growth, increased death benefits, and a source for premium payments in later years. Those who buy policies too late are unable to reap these benefits. For whole life policyholders, this means accepting lower death benefits and forgoing a cash-value nest egg, and for universal life policyholders, it means possibly paying ever increasing costs of insurance out of pocket. Universal life policies provide inexpensive premiums at the start, but as the cost of insurance rises with age, the premium increases with it. Universal life policies are designed to use the accumulated cash savings value to offset these higher costs. For a universal life policy to be fully effective, buying at a young age is essential.

Continue to learn about why health is so important when it comes to buying insurance, and how this plays into age at purchase.