As you get older, you’ll probably start being targeted with adverts for life insurance (you’ve potentially clicked on one to be reading this). But if you’re in your twenties or thirties, you’re probably wondering what possible use you could have for a product that you can’t envisage needing until decades from now.
But there’s a good reason why life insurance can be a very smart investment when you’re younger. And in the few minutes you’ll take to read this article, you’ll discover how it could benefit you, especially if you’ve got a student loan or plan to buy a house or start a family. If you’re already minded to get life insurance, click below to use our free comparison tool. Otherwise, keep scrolling to find out more.
Life insurance is also. surprisingly affordable. Just adding a small monthly cost that could be less than your Stan or Disney+ subscription could protect your future.
Why would I need life insurance?
In a nutshell, life insurance is useful to have if you have any sort of financial commitment; from a mortgage to student loans or any co-signed debt.
In the event of you passing away, you can prevent your loved ones from shouldering the cost and replace lost income if you have dependents.
While it seems a bit morbid to think about your own mortality, life insurance also has a number of benefits when you’re alive.
There are products, such as trauma, income protection and total & permanent disability cover (or TPD for short) that can also provide financial support if you suddenly get seriously ill or are unable to work.
Given that 1 in 2 Australians get cancer before the age of 85* and 30% of Australians who suffered an injury or illness at work didn’t return to their job**, having the right type of insurance can give you peace of mind at what is likely to be a stressful time of your life.
For a very quick summary, take a look at the table below. And if you’re interested in finding out a bit more about life cover, check out our guide to the different types of life insurance.
How do I find a life insurance policy that I can afford?
There’s two types of premiums (the amount you’ll pay). A stepped premium increases as you age whereas a level premium allows you to lock in a price until you reach an age defined by the insurer; usually 65-70 years old.
Level premiums, somewhat understandably, cost more, to begin with, but in the long run generally work out cheaper than stepped premiums.
That said, stepped premiums can be a useful short term option as they start cheaper, before being recalculated as you get older. In both cases, we’d recommend talking to our experts to understand the best option for you.
Is life insurance affordable?
Life insurance can be surprisingly affordable, especially if you’re under 35. While everybody’s circumstances are different, it’s typically cheaper the younger and healthier you are. So by investing in a policy today, you could be saving your future self money.
Life insurance isn’t really a one-size-fits-all product and whatever policy you choose will need to be suitable to your lifestyle and finances. But, in some cases, this could be the same as the price of a coffee per week.
At Life Insurance Comparison, we have a team of Australian-based experts, ready to help you do the legwork, scouring the market for policies from our trusted panel of insurers.
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So, is life insurance worthwhile? That’s for you to decide, but investing in life insurance can be one of the most responsible financial choices you can make in your 20s or 30s, or at any age.
And for potentially the cost of one flat white a week, you could be getting peace of mind that your finances and loved ones are protected if the worst happens.
*Source: Cancer Council Australia.
** Source: Australian Bureau of Statistics,
work related injuries, 2017-2018.
This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.