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Why young adults should buy life insurance

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If you’re a newly minted college graduate, working your first professional job, or just generally finding your way as an adult, you probably don’t think much about life insurance. You may even dismiss it because you think it’s too expensive or you don’t need it.

So, it might surprise you to learn that your 20s or early 30s are often the ideal time to purchase life insurance. Doing so might be one of the smartest financial decisions you make as a young adult.

Why should I buy life insurance?

In a nutshell, buying a life policy provides financial protection for your loved ones if you die. It’s particularly important if your spouse couldn’t cover debts, like a mortgage or car payments, without your income. And it’s critical if you have children and want to ensure that their child care, college tuition, and other expenses will be paid for in the event of your death.

But life insurance can be important even if no one depends on you for financial support. If your parents or someone else co-signed student loans or a mortgage for you, that debt transfers to the co-signer if something happens to you. Making the co-signer the beneficiary of your life insurance will allow them to cover the debt in your absence.

When should I buy it?

If you’re getting married or you have a baby on the way, you should purchase a policy as soon as possible. But even without such major life milestones in your near future, you still might want to consider buying a life policy now, especially if such events might occur within the next 10 years.

That’s because life insurance rates are based on your age and health and tend to increase yearly after you turn 30. A healthy 30-year-old male, for example, can lock in a $500,000 life insurance policy for about $40 per month. But a healthy 45-year-old will pay more than double, about $102 per month. And once you lock in your rate, the insurance company can’t take it away from you, even if you’re diagnosed with a serious illness.

Do I need to use an insurance agent?

While plenty of online tools can help determine how much life insurance to purchase, the various types of coverage can be confusing for a first-time buyer. A professional agent can help lock in the best policy for you and your budget.

Ask an agent

Q: Should I buy the life insurance offered by my employer?

A: It’s almost always a good idea to opt into a group life insurance policy at work, because it’s typically inexpensive. However, it usually disappears the day you leave your job—meaning you could be left with no coverage. That’s why it’s smart to have a personal policy, too. —Ryan Blackport, AAA life insurance specialist

Your AAA life insurance specialist can provide more info. Visit a branch, call (866) 298-5324, or go to AAA.com/life. AAA life insurance specialists do not provide legal, tax, or financial advice.

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