I'm 23 and single, should I buy life insurance?

Asked by Tony

15 Answers

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Answered by Dan Crimmins, Financial Adviser in Woodcliff Lake, NJ
Probably not. Is someone depending on your income for support right now? If so, you may want to provide money to support them if you were to die.
If not, you probably have no need. You do need to begin to save for your future and doing so inside a life insurance policy that you probably do not need is not wise. Invest without the life insurance. | 05.06.14 @ 21:02
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Michael Hoffman, RFC, CLU, ChFCPRO+ in Grass Valley, CA
Tony, If you think that you may ever need life insurance to help provide for our family then getting started sooner rather than later will help to create a lower premium outlay. The performance of the living values inside a permanent policy will provide a good alternative to the safe investments that you will want in your portfolio. Dan is wrong, allocate something now and you will be able to use it later. | 09.22.14 @ 21:26
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Saving in WI — There is no need for a 23 year old single person to have whole life insurance. Listen to Mr. Crimmins. | 08.10.16 @ 17:25
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Mark Smith, Insurance Agent in Cowan Heights, CA
Tony, it's a question that depends on your income, health, dependents, and assets. Dan makes sense saying that if there's no need, don't buy it. Michael makes sense suggesting that since you're going to need it, might as well buy it now, recognizing that it's a single piece of your portfolio. (He's probably also thinking you're at your healthiest, and accordingly will get the best rates.)

My favorite class in college was mathematics of finance. It helped me understand the time value of money, and how elegant life policies can be. Still, there's a cost to them, and I'm more in Dan's camp: amass money for the future (real estate, stocks, etc.), and when the true need for protection comes (married and in debt), get your coverage then. If budgeting and investing are a challenge for you, Michael may be correct that you should get a permanent policy. Me? I do not have a policy that builds value. It has a level premium for 20 years that is *low*, and I have that on auto-pay that I don't think about. The rest of my money flows into tax-deductible accounts (non-Roth because unless my tax bracket changes at retirement, there's no mathematical advantage to the ROTH-style accounts, no matter what you might hear)! | 01.20.15 @ 19:15
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Francisco Ramirez, Insurance Agent in Round Lake Park, IL — At such a young age, a mutual permanent life policy with paid up additions can both amass money and end up being less costly. Of course, the initial coverage amount will be a lot less for the same expense. | 03.04.15 @ 17:23
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Raphael Baker, Insurance Agent in Atlanta, GA
It depends on your needs. Assuming you are healthy, right now, at your age rates would be much lower than they will be when you are older. When it comes to life-insurance, you'll never be younger and typically not much healthier than you are today. | 01.21.15 @ 22:30
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
I like Michael’s approach: “sooner than later” works very well when one is younger. Permanent Life insurance purchased when younger solves a lot of problems when we are not so young later. Example: Universal Life is permanent coverage, and without getting too technical, it can be used to create a “bank” that can be accessed later. One of my policies is UL with a very good interest rate. Over time, compound interest plus premium will make the cash value grow. I will pay premiums for 10 years, and then stop paying it so the cost becomes zero, going forward. At the same time, however, the cash value (and the death benefit) continue to grow. Regarding the death benefit: it is flexible should you need more coverage later. Regarding the cash value: you may borrow against it (your collateral is the cash itself). The insurance carrier lends against that collateral. However, none of this is doable if you do not own the policy, and it is not as rosy if you start it late. Why? Because mortality costs make it more expensive, and also a key ingredient for cash accrual is time, which you have more of when you are younger. As you have surmised, this only works with permanent coverage, not term coverage which has no interest rate to allow cash to develop.


| 01.23.15 @ 01:36
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Burt Williamson, MBA, CFP in San Mateo, CA
Yes, but not term. Cash value life insurance managed properly offers you more flexibility in managing your money than any other asset. Do NOT buy a variable universal life policy, as you will need an expert to help you mange it for the rest of your life. | 01.26.15 @ 18:04
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
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Answered by Arin
Yes, it's cheaper now then later. Lock in your health and age for the rest of your lifetime. | 03.03.15 @ 21:56
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Paul Carag, Financial Adviser in Renton, WA
Tony, I agree wholeheartedly with Michael. Your insurance cost will only increase so if you ever feel that you would be open to redirecting a portion of your low to moderate risk assets and annual savings to an additional financial vehicle, then a permanent policy is something to consider. My clients use it to eliminate their debt, recover business costs and supplement their retirement portfolios and qualified plans. I would encourage you to be pleasantly surprised. | 04.16.15 @ 17:59
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Willard R. Brumbaugh, LUTCF in Victorville, CA
You will never be younger than you are right now. The odds are you are at your healthiest right now. At 23 the risk cost of a policy is minimal, whether Permanent or Term. Most likely you will need life insurance at some points of your life, but there is no guarantee that you will be able get it at a preferred rate at the time you recognize the need.

Getting a Term policy at your age is easily affordable, and this would lock in the coverage for when you need it.

However, getting a competitive Permanent policy will over time provide you a greater gain than buying Term and investing the difference when comparing vehicles of similar risk/safety. This point has been supported by government regulations limiting how much could be paid into the policies to maintain the advantages that Whole Life and Universal Life have over other investment strategies.

| 05.22.15 @ 02:42
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Saving in WI — Tony, do not buy whole life insurance. Buy term if you have people depending on your income. If no one depends on your income you do not need life insurance. | 08.10.16 @ 17:19
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Ebrahim Rad, LUTCF , CLTC , MDRT in Woodland Hills, CA
Please sit down with one adviser who you can trust and he or she can advice you base on your financial goals, tax level, risk tolerance. | 11.04.15 @ 03:22
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Personally, I think that at 23 years old, you should be commended for even thinking about purchasing a policy! It's rare for people that young to really dive into the pros and cons.

In my professional opinion, the earlier one purchases life insurance, the better. Depending on the type(s) you purchase, you are guarding against creating a financial burden on your loved ones down the road, but perhaps more importantly, you are protecting yourself against being uninsurable (at least at a reasonable premium) down the road should your health deteriorate.

Your need for insurance will probably change as you age and as your life circumstances change. At some point you may need a combination of term, universal and whole life. If you are smart in your choice of policy and maximum-fund it, you may also generate quite the tax-free income stream for your retirement years, all while diversifying your portfolio.

Seek the counsel of a qualified independent broker, research the companies he/she recommends, and be sure you know all the pros and cons regarding each policy type.

Best of luck to you!

Mike Zaino
www.TZGFinancial.com | 02.19.16 @ 19:19
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Larry Gilmore, Insurance Agent in Marysville, WA
I guess I would answer this with a question. Do you have a mom and dad? If something were to happen to you, your mom and dad would need to take care of what you leave behind. Do you want them to do that at their expense? If the answer is no, then get some insurance. If the answer is yes, you shouldn't be here then. I bought my first policy as a single guy at 19. Just for that reason alone. I did not want my mom to have to use her savings to bury me and square away my situation. I wanted to make sure I didn't double whammy her with my loss and also having to find a way to pay for settling up things for me. | 02.23.16 @ 19:52
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Saving in WI — I agree with Larry. A cheap term policy should cover your death expenses. | 08.10.16 @ 17:26
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Caleb Brown, Financial Advisor in Grand Rapids, MI
I cannot tell you with a straight face that you have a need for life insurance because you have no dependents. As a younger, single male I'm in the same boat as you. Ask yourself this question: in the next 5 years, do I see myself starting a family? If yes, then I would purchase a policy as soon as you can. It will never be cheaper than it is right now. So take advantage of your age and lock in a lower rate today. If no, then I wouldn't have a problem with you waiting. | 04.27.16 @ 18:40
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
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Answered by Debra Murphy
Wow! I commend you for taking responsibility and considering your options at your age! Truth of the matter is, as surprising as it may be, your age group, particularly males, has one of the highest mortality rates: http://www.worldlifeexpectancy.com/usa-cause-of-death-by-age-and-gender and it is less expensive to purchase while you are younger. IF your parents have college loans they co-signed on your behalf, they should get life insurance on you. They are liable for your loans in the event of your death. There is great advice reiterated through the above comments, except....never get anything except LEVEL TERM life insurance. In addition, buying life insurance is not a product you want to buy without knowing ALL of the benefits that come inside the policy. Think about buying a car - are the engines the same? Are the tires? Same analogy with life insurance. You get my drift. In addition, the life insurance industry is not regulated. There are many "gimmicks' out there which will "pull you in" with "promises". Watch: http://www.cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/. Trust me, that is why I do what I do and help clients ALL the time to educate them on what they own, how they work and what their options are so they can be an educated consumer. | 06.03.16 @ 16:39
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
Answered by Larry Gilmore, Insurance Agent in Marysville, WA
I bought my first life insurance policy at 19. Why? Well I can give you all sorts of industry jargon to justify it, but I will tell you why on my terms. I purchase life insurance as a young single guy with no obligations to anybody because of my mom.

I realized if I were to die at a young age, somebody would have to take care of my crap I left behind and that would be my mom. So, I just died which would have crushed my mom. Now, since there is NO MONEY to take care of my funeral or her loss of time at work to actually grieve for me, I would not only be dead, but hanging debt on my mom. Just couldn't do that. I didn't need industry jargon or formulas to figure that out. Love my mom, know she would be crushed if I died, didn't want my death to be a financial burden for her.

Let's hope your life is meaningful to somebody else and you love them enough not to double whammy them with your death and debt. | 10.16.16 @ 05:13
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:16
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