Life insurance is an important topic to understand, especially as you mature and get older. First, what is life insurance? Life insurance is a contract between a policy holder (you) and an insurer. The policy holder pays an insurer a premium, usually monthly in exchange for a premium when that unforeseen event (death, illness etc) occurs. Contracts do vary so the language and processes can vary from time to time.
An article from newyorklife.com highlights why someone would purchase life insurance at the age of 23. Through asking a colleague, this 23 year old individual learned that because her colleague Bill’s father purchased life insurance at a young age, it allowed Bill to help get through and pay off college debt. Bill also disclosed that life insurance is not just beneficial to an individual who has died, there are benefits to it while you’re alive. Living benefits are benefits available to you while you’re still alive. You can use these benefits for anticipated as well as unanticipated life events. If you have a permanent life insurance policy, you can use these funds for things like purchasing a home, education bills, or even a wedding. Bill has not only used some of his funds to help pay for his school expenses but he’s also prepared to again use those funds to help for his wedding which he is now having at the age of 34, 11 years after he purchased his policy.
It’s very much okay to have your doubts about purchasing a policy at such a young age. It’s encouraged that you sit down with an insurer and maybe even a family member who has a policy. Ask questions, find out when they purchased theirs. Maybe even find out why they didn’t purchase one, they may have had different circumstances from you.