Life Highlights
By Joel Zimmerman

Why I Became a Life Insurance Holder At 23

I was sitting across Ethan and was having one of our last ‘company lunches’ together as he was relocating. Discussing our future plans, the topic of retirement came and I asked how he planned for it. I expected the usual answers such as 401(k) plan, personally-held stocks and bonds, IRA accounts etc. Nonchalantly, to my surprise, he added, “Oh and life insurance too!”

I always thought that the employers gave a life insurance to cover us. I never thought it could be a part of one’s financial strategy. Ethan read my mind and told me how life insurance has always been a part of his family’s financial portfolio due to the living benefits the policies offered.

Surprise – There are Living Benefits!

“Wait! There are living benefits of whole life insurance too?” I exclaimed with utter surprise. I thought life insurance helped only after one died. Ethan was quick to dismiss this assumption by stating that there are living benefits that one can enjoy.

Recounting his story, Ethan told me that he purchased a policy when he just 24, one year older than my current age. Through the years, he enjoyed the returns of the living benefits. He said that the cash value accumulated in a permanent life insurance policy helps in paying for life’s anticipated and unanticipated events, like buying the first home, your wedding or education/medical expenses. He continued to fund his whole life policy through his career, which will pay off after he retires as he can use some of the cash value to supplement his retirement income.

“Consult with your agent to manage your cash flow carefully to avoid a lapse of the policy. Make sure that your loans are structured properly with your agent to circumvent tax consequences.” The more he spoke about this, the more it made sense to me. The 23 year old me was now seriously considering buying a life insurance policy.

Can’t I Wait A Few More Years

While I wanted to buy a policy, one issue really bothered me. With student loans and credit card debt, I wasn’t sure if I could afford to spend on insurance right now. I wondered if I should wait a few more years when I could afford it.

Ethan dispelled this thought by explaining that the price to insure me will be lower the younger I am. Since I’m in good health now, the premiums will be lower. As I get older, my health might deteriorate, causing the cost of the premiums to rise, which can further make the policy unaffordable. Eventually, this can risk my ability to even buy a policy. He added. “Locking a premium now might ensure that the price never increases in the future.”

By the end of the meal I was convinced that by becoming a life insurance policyholder now, I can have a secure financial structure for my future. So, tomorrow Ethan and I are going to look at different life insurance types for me. Soon, I will be a proud 23 year old life insurance holder!

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