The last thing on your mind as a young adult is covering the cost of your death. While you likely have a long, full life ahead of you, anything can happen, and it pays to be prepared. Your loved ones, even just your parents, can benefit greatly from the financial security life insurance provides. For example, did you know that your parents could become responsible for your student loan debt if you pass away before it’s paid off?

Cosigners are responsible for the policy in the event the recipient is no longer alive. Beyond funeral costs and other expenses, a life insurance policy can alleviate stress on your loved ones as they mourn your loss. It gives them the cushion of monetary support to allow them to focus on their emotional health. After all, they may need to step in and sell your home, which can take a toll mentally, so having funds leftover for closing costs will help in the long run. You can always update your policy as you grow and life changes. For example, you’ll likely want higher coverage if you decide to get married or become a parent. The good news is that life insurance is extremely dynamic and flexible, and young adults can cash out in serious benefits for applying in their 20’s.

You Can Cash In Your Policy Later

Many types of life insurance have both a fixed death benefit and unfixed cash value that increases over time. You can benefit from this while you’re alive by either surrendering the entire contract in a life settlement or taking out a loan against it. It’s important to recognize the potential of this option as many policyholders mistakenly think it will be added onto the death benefit if they pass; instead, any remaining cash value simply returns to the insurance company. As a young adult, you have the ability to qualify for policies with significant cash values and take out money to improve your life later.

You Can Get the Best Deals

Being able to qualify in and of itself is a blessing; older people with pre-existing conditions or terminal illnesses who desperately need coverage may be unable to secure it. Acting now will give you the peace of mind that your family is going to be taken care of. Prior to getting coverage, you will have to receive a medical exam and provide information about your family’s medical history. Those who come from families with severe hereditary conditions or have a history of cancer may have to pay slightly higher premiums. But in general, those in their 20’s who are in good health can get the best rates and have the greatest options in terms of coverage limits and benefits.

Exploring Your Options

You’ll be faced with several choices when it comes to life insurance. The most common type of policy is called term life insurance. It lasts between five to 10 years, and it pays a death benefit to your insured beneficiaries if you pass away in that time frame. This is likely not going to be highly profitable for someone who is only 20, so you may look into permanent or universal life insurance instead. These forms of coverage have higher premiums, but you’ll also be able to build a cash value that can be taken out and used however you like later. This amount also increases the longer you hold the policy. For someone who is just starting their adult life, this can translate to a decent amount of money to look forward to by the time they reach retirement.