Term life is the most popular type of life insurance with good reason.
How do you do, fellow kids? Did you know that not having life insurance is wiggedy-wiggedy wha- and this is ridiculous. Look, there are a lot of types of life insurance out there. And the amount of options can get overwhelming. But figuring out the best life insurance for young adults is something a lot of people are talking about. More young adults are buying life insurance thanks to Ms. Rona floating around. And the most popular type of life insurance is term. In 2019, 71% of consumers who owned a life insurance policy had term life insurance. That number was up from 63% in 2017. Read on as we discuss some reasons as to why some people feel term life insurance is better for them and their needs.
The Wyshbox Blog
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5 reasons why flexible term coverage may be better for young people
We don’t want this to be a whole life vs. term life, battle royale, free-for-all kind of deal, okay? Whole life has its benefits, trust. But term life is very popular and for good reason. So what makes term life the hot insurance it-girl?
1. It’s not permanent
Unlike other types of life insurance that last your whole lifetime, term life insurance covers you for a set number of years. You can choose term lengths of typically 10, 20, or 30 years depending on the insurer. This is a great option if you’re looking to cover some short-term needs such as rent, income replacement or supplement for childcare, or funeral costs. If that’s all you want, then term life insurance coverage may be a great option for you.
2. It’s generally cheaper
We don’t mean cheap in, like, a miserly sort of way. We mean it in a “you pay less” sort of way. How much cheaper are term life policies? Well, in the marketplace, a 30yo male on a 20-year term has an average annual premium of just $229. Compare that to a 30yo male on a whole life policy whose average annual premium costs $4,308! And in some cases, whole life premiums may cost you almost 10x the amount of term life policies. That’s quite a difference. Cost-wise, term life may be better for your needs and your wallet.
3. It’s convenient
When you compare whole life vs. term life, term comes out to be a bit more convenient, depending on your needs. See, whole life can have extra bits about investments and cash values, which we’ve already written about. But term life insurance can be focused on more immediate financial needs. Let’s say you want coverage to make sure your kids are protected while they're young, but you don’t think you’ll need coverage for when they’re financially independent. In this hypothetical, term life is far more convenient to your needs than whole life would be. Again, it comes down to your needs.
4. Flexible coverage
The only constant is change. Your 20s are probably going to be very different from your 30s. So you want to make sure you have a life insurance policy that can reflect your needs as they change. Can you increase your term life coverage? You can, depending on the insurer! For example, you may not own a home right now. But if you find yourself a homeowner in 5 or 10 years, consider adjusting your coverage to tackle your mortgage. Being able to have a policy where the amount of coverage fits your needs is a great thing.
5. Extendable coverage
Because term life can be more convenient and flexible than whole life policies, you can choose to extend your policy, should you want to do so. What do we mean? Well, if you selected a 10-year term, you may be able to choose to renew for another term. You don’t have to be stuck in a permanent policy and can expand when you want. And some insurers may allow you to switch from term to more permanent coverage options. Talk with your insurer about how (and if) you can extend your coverage.
So should you get term life insurance?
We can’t just give you the answer here. Mostly because it all comes down to your needs and what you want from your insurance policy. Generally term life insurance has great coverage for low costs. And because it’s not permanent, you can try it out for a term and see if it’s the right type of insurance for you. No pressure, really. Some insurers, like Wyshbox, are 100% digital, so you’re able to apply at your own pace. Apply from the comfort of your toilet seat, if you like. Or couch, whatever works for you.