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As a young 20-something, you generally prioritise paying off your student loans, buying a car, moving into your own apartment and kick-starting a career. Life cover is not on your bucket list. However, there are numerous arguments to be made for buying life insurance at a young age – the biggest advantage being the price of the premiums.

Petrie Marx, Product Actuary at Sanlam, says that millennials put things like life insurance off. “Generally, they’re buying homes, having children and getting married at much later stages in their lives and they generally also postpone buying insurance. There’s a common perception that life cover is pricey and irrelevant, which makes it a grudge purchase when there are groceries, rent and other bills to pay. Plus, debt’s a huge issue in this country, with many young people saddled with significant student loan repayments.”

Despite this, Marx says that life cover is important. Here are the reasons – and there are some benefits – to get life cover in your 20s.

Lower premiums

Age really is on your side in your 20s. In general, young adults enjoy better health which will equate to lower monthly premiums with no exclusions. Multiple factors impact insurance premiums, but young people are considered less likely to claim, which makes them a lower risk to insure.

For example, a healthy, non-smoking female could expect to pay around R190 in monthly premiums for R1 million life cover at 25. If the same individual took out the same level of cover at 45, she could possibly pay around R460 per month, if she maintained a healthy risk profile. By purchasing insurance at an early stage in life, your insurance will stay intact as per your policy wording – even when the state of your health changes as you get older. If you wait to buy insurance at a later stage in your life, you are likely to face higher premiums, or have exclusions.

You need to protect your assets and income

As soon as they start a career, young people tend to think of physical assets first – buying a car, or investing in property. However, as a young person your long-term income earning potential is really your biggest asset and has to be protected with sufficient life cover.

“As a young person, your long-term income earning potential is really your biggest asset and has to be protected with sufficient life cover,” says Petrie Marx, Product Actuary at Sanlam.

Your loved ones will not be liable for your debt

In 2015, it was estimated that students owed just the top eight universities alone over R700 million. This figure is more than likely to have increased over the last five years and it excludes debt that students accumulated through bank-funded student loans. Student loans are an inescapable debt and one that should not burden your family and loved ones. In order to protect your family from being liable to pay off your debt in the event of your death, it’s imperative to have life cover.

Things can go wrong at any age

People under 30 usually claim due to unnatural causes. A bad accident can compromise one’s ability to receive an income, which has potentially detrimental consequences for a young person with more or less 40 years of earning potential ahead.

Please consult with a financial planner before you take any action regarding your policies. Sanlam is a Licensed Financial Services Provider.

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Sanlam Life Insurance is a licensed financial service provider.
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