Everyone’s situation is different.
Mine began recently with a bunch of firsts: my first job, my first apartment and my first life insurance plan. I am now 25, single with no children, some disposable income – and life insurance coverage.
How did this happen?
The conversation began at work. I asked Bill, a colleague and mentor in his late 30’s about how he intends to plan his retirement and financial future. He rattled off the usual: a 401(k) plan, Roth IRA account, personally-held stocks and bonds, and money market account. Then he mentioned life insurance through his professional association.
I was surprised by that last one. Life insurance as part of his financial portfolio? My understanding was that we received life insurance through our employer, so basically, we were covered. I had never considered other avenues to seek out life insurance.
Bill went on to say that life insurance has always been a part of his family’s financial blueprint, and was purchased primarily for the death benefit. The Group Term Life Insurance plan that Bill’s grandfather purchased early in his own life actually helped Bill’s father when his grandfather unexpectedly passed very young. Bill added that the group term life insurance plan he owns now is helping protect his family’s standard of living so that they wouldn’t have to change their lifestyle or commitments if anything were to happen to him.
While I was glad Bill’s father was covered when his father unexpectedly passed, I still didn’t view life insurance as part of any financial strategy – particularly because I am only taking care of myself without the responsibility to care for someone else. Bill went on to quickly dispel that notion for me.
Assessing the Need for Young Professionals
Individuals fresh out of college and starting a career may want to consider term life coverage since many have student loans that need to be repaid. If they should die before the loans are repaid, that obligation could fall to their estate or family. Group term life insurance can safeguard against that and many other financial burdens you could leave behind…such as credit card debt, medical bills, car payments, rent and funeral expenses – just to name a few.
Starting a career and being independent is the first step toward achieving financial stability. It’s up to you to protect what you’ve worked so hard to earn.
Affordability: the Benefits of Beginning Early
As we got deeper into the conversation, the idea of buying group term life insurance made more sense to me. Still, there were cost considerations. I am paying off a student loan, and trying to erase my credit card debt. So, I had some lingering doubt.
What really sealed the deal for me, however, is when Bill recounted “Basically, the younger you are, the lower the price will be to insure you. Also, you’re in good health now, so your premiums will be lower than if you decided to get life insurance at my age. Every day you wait the premiums increase. Rates may increase as you grow older, but you can be locked in for 5 or 10 year periods. Your health status may change and put you at risk for being unable to obtain life insurance at an affordable cost, or even at all. Best of all, life insurance through our professional group association is designed to be competitively priced.
Portability: the Benefits of Group Term Life Insurance through the AIA Trust
Although I have some Life Insurance through my employer, Bill went on to explain that it may not be enough. When I no longer work at my firm I would lose coverage altogether. He also noted that group term life insurance coverage through my professional association is portable, so when I move to another employer, or work for myself, I could still keep my life insurance coverage.
Additional Considerations: Protect What You Have Today
Life insurance purchased today can also protect your future insurability. Though single today, you may eventually have a family, a mortgage, other debt, and aging parents to consider. Think of group term life insurance as “protection” against financial liabilities and responsibilities.
“So, with a little belt-tightening now, by purchasing life insurance, you will have an important and secure financial foundation that can serve you well as you get older,” Bill concluded.
This has certainly been an eye-opening experience for me. Take charge of your financial stability and start your own assessment by visiting the AIA Trust website or calling the plan administrator, Hagan Barron Intermediaries at (877) 801-3727. Please note that this is a fictional scenario to illustrate some of the benefits of group term life insurance.
This Information is courtesy of New York Life Insurance Company, used with permission. It is intended exclusively for general information only.