Should I get life insurance in my 20s?
When you're young, there are so many things to look forward to for example—higher education, starting a career, or even starting a business. While working towards these aspirations and planning your journey, sometimes it's possible to overlook certain important things such as life insurance. You might be wondering where life insurance fits in all this, and this article might help you get a better understanding of how life insurance can be an important consideration at a young age with the help of a hypothetical individual named Summer and her life overview.
Meet Summer
Summer is a 22–year old who's recently graduated from college. She's super excited to start her career and take the first step towards being financially independent. Afterall, she's got to start making a dent in her $30,000 student loan.
Summer's parents are quite supportive of her, so along with the education loan, they've also co-signed her car loan. She rents an apartment close to school, to save her time getting to class. Summer also worked part-time at a local bakery to manage her expenses and build her savings.
She's now thinking about her finances and putting together a plan that can help her manage her financial goals. She doesn't want her parents to be burdened by the loans they have co-signed to help her in case she was to pass away. After weighing her options and considering her financial future, she's decided to get life insurance for herself and is considering term life insurance offered by TD Insurance.
Let's get an overview of her financial situation
Below is a personalized summary of Summer's income, expenses and debts to illustrate how Summer calculated her need for term life insurance coverage. The calculation of your coverage is dependent on your financial scenario which include your assets and financial obligations.
Summer is a 22-year-old, single female, who is a non-smoker, and lives in Ontario. At her job she'll be earning $60,000 per year before tax. She rents a condo apartment at $1,800 per month. Her total debt is $70,000 which includes credit cards, student loan, and a car loan. Summer currently does not have any life insurance coverage.
How much life insurance coverage does Summer need?
Let's understand how much coverage she may need with the help of the TD life insurance calculator.
Summer entered the financial information mentioned above into the TD Life Insurance Calculator, and it suggested a coverage amount of $175,000.
TD Insurance offers 10, 20 and 100 year term life insurance plans. Summer chose the TD 10-Year Term plan because she thinks the plan better suits her shorter-term financial obligations like her student and car loans. In case she passes away, the death benefit can be used by her beneficiaries (in this case her parents) however they wish including paying off the debts.
How much will the TD 10-Year Term Life plan cost Summer?
Since Summer is 22 years old, a non-smoker female in good health, her premium is $12.60 per month for a TD 10- Year Term Life policy with a coverage amount of $175,000. This includes the 10% discount Summer received for being an existing TD customer1
Note: The results of the TD Life Insurance Calculator will vary based on the information you have entered. The premiums shown here are as of 10th April 2024.
Are there any benefits of buying a life insurance plan at a young age?
Buying a life insurance plan at a young age may cost less than buying it when you're older. This is mostly because as your age increases so does the risk of insuring you (as one's health begins deteriorating with age).
If you have debt (for example a student loan), you wouldn't want the family members who co-signed the loan with you to be left with unexpected expenses if you pass away. If those family members are added as beneficiaries on your term life insurance policy, they could be paid a tax-free lump sum benefit in the event you pass away and use the benefit however they wish, which can include paying the loan.
If you decide to have children or have aging parents that rely on you for your income, you could help protect their future financial security if you were to pass away by planning ahead and purchasing life insurance at a young age.
Before purchasing life insurance from any insurer, one should understand what their needs are and what the life insurance plan offers.
If you would like to find out how much TD Term Life Insurance coverage you may need, use our TD Life Insurance Calculator. You may also speak with a TD Life Insurance licensed advisor.
What are the benefits of term life insurance from TD Insurance?
Some of the benefits of a TD Term Life Insurance plan are:
- It has a conversion option. You can choose to convert your TD Term Life Insurance plan from a 10-Year Term or, 20-Year Term Life plan to a Term 100 life insurance plan, at any point up until your 69th birthday. No health questions or medical required1.
- With our 10-Year and 20-Year Term plans, coverage ends at the age of 80, and our 100-Year Term plan lasts your lifetime.
- You could be instantly approved for up to $1,000,000 if you are under 50, up to $500,000 if you are under 54, or up to $250,000 if you are under 60.3
- You are eligible for a 10% discount for a new 10-Year and 20-Year Term Life Plans if you are an existing TD customer or if you complete your application online4.
Also, it's good to note that there are several factors which determine the cost of your coverage, but a few key ones that insurance companies consider includes your age, overall health (including medical history), whether you're a smoker or not, and your sex at birth.
There are resources available to help you purchase life insurance. For instance, you could use the TD Life Insurance Calculator or speak with a TD Life Insurance licensed advisor to determine how much coverage you might need. Or get started with a quote online.
TD Term Life Insurance plans are individual life insurance plans underwritten by TD Life Insurance Company. See Insurance Policy for coverage details, including limitations and exclusions.
The content on this page is for general information purposes only and does not constitute legal, financial or insurance advice. Speak to a life licensed professional advisor regarding your specific situation. The information contained herein, is subject to change without notice.
1. Discounts are available to eligible applicants who apply for a new TD 10-Year or 20-Year Term Life Insurance policy. Offers cannot be combined with any other offer and is subject to change or may be withdrawn at any time.
2. This option is available up to the policy anniversary nearest the Insured’s 69th birthday, and premiums will be based on the Insured person’s attained age at the conversion date.
3. Instant approval is subject to the responses you provide to certain health and lifestyle questions in your application and is available for coverage up to $1,000,000 if you are under 50, up to $500,000 if you are under 54, or up to $250,000 if you are under 60.
4. The discount is only available to eligible applicants who apply for a new TD 10-Year or 20-Year Term Life Insurance policy using the online application. Offers cannot be combined with any other offer and is subject to change or may be withdrawn at any time.