Financial experts across the globe discourage people from saving cash in liquid form and instead encourage them to invest in as many reliable investment opportunities as possible. One of the most recommended and highly profitable investment forms is life insurance.
According to Bill Schantz, people as young as 18 should start investing in life insurance the day they begin making their income. There are two main types of life insurance plans that people can choose from; the permanent or whole life insurance plan or the term life insurance.
Continue reading below to learn why financial experts encourage young adults to invest in term life insurance plans.
According to Bill Schantz, Term Life Insurance is Ideal for Young Adults. Why is that?
Both whole life insurance and term life insurance are designed to help an investor’s wealth grow over time. Moreover, both types of life insurance insulate the investor’s wealth against the external market conditions.
However, the terms and conditions of term life insurance are designed to cater to specific needs. Some of the reasons why young adults should choose term life insurance as one of their investments are as follows:
1. Allows Cash Chance to Grow in Value
Like every other investment opportunity, a term life insurance plan is designed to allow an individual’s wealth to grow. This is why Bill Schantz encourages young adults to begin their investment in a term life insurance plan as soon as they can, as the longer their wealth stays invested, the more time it will get to grow.
2. Insulates the Wealth Against External Conditions
Like whole life insurance, term life insurance is designed to remain unaffected by external market conditions. This is an extremely rare and unique benefit that no other form of investment can offer.
While other investment opportunities can cause a loss in wealth due to volatile economic conditions, term life insurance guarantees cash growth. This is why investing in term life insurance as a young adult is one of the wisest and safest financial decisions one can make.
3. Less Costly Premiums Compared to Whole Life Insurance
One primary reason younger people are more drawn to investing in term life insurance instead of whole life insurance is the relatively lower premiums.
While a whole life insurance premium can go as high as 200 to 350 USD per month, the premium for most term life insurance plans is around 25 to 50 USD.
As a result, this form of investment does not require a high income or a lot of cash reserves and is one of the most affordable and beneficial forms of investment for younger people who have just begun making an income.
4. Easy Accessibility
Whole life insurance may offer a significantly higher growth rate; however, it does come with its own set of conditions. One major drawback of investing in a whole life insurance plan is that the investor cannot benefit from the cash growth for at least ten years.
If the person tries to cancel and withdraw their money before that period, they will not be liable for receiving any cash value benefits.
On the other hand, term life insurance is designed to be highly accessible and liquid and does not have such limiting conditions. Hence, the young person can utilize the cash growth whenever they need to pay for the expenses.
Moreover, according to Bill Schantz, this feature allows younger people a chance to pay off their student loans, afford a car, and apply for a house mortgage.
Final Thoughts by Bill Schantz
Young people should invest their money in term life insurance, as doing so is much more affordable than investing in a whole life insurance plan. According to Bill Schantz, the investment will help their wealth grow, allowing them a chance to afford the expenses of life.