Early adulthood is an excellent time to buy life insurance. You can lock in lower rates while you’re still figuring out your life plans and can reap the benefits of an enhanced financial safety net upon experiencing major life changes like marriage, homeownership, starting a business, and starting a family.
Riders are a highly effective way to protect your loved ones now and later in life. Here’s how life insurance riders work, and what types best fit young adult buyers.
What are life insurance riders?
Life insurance riders are add-ons that you can use to customize your policy to specific needs, providing flexibility as your life and finances change in the future.
Tailoring your policy
A key benefit of life insurance riders for young adults is that you can pick the riders most relevant to your lifestyle, location, and future and leave out the ones you don’t think are relevant to you.
Riders are particularly useful for young adults in transitional phases of life, like entering the workforce and getting on a career ladder for the first time. If homeownership is a goal and you plan to buy a home in the next few years, life insurance riders can provide additional protection for your loved ones and ensure a new mortgage can be paid off in case of the unexpected.
Common life insurance riders beneficial for young adults
Accidental Death Benefit Rider
If you have an active lifestyle, the accidental death benefit rider could be a vital add-on to your life insurance policy. The accidental death benefit rider provides additional benefits if your death occurs within 180 days of an accident.¹
Waiver of Premium Rider
The waiver of premium rider allows you to keep your life insurance in case you become disabled and unable to work. While you manage student loans and other debts, you can rely on your life insurance to be there for your loved ones without having to pay premiums.
Guaranteed Purchase Option Rider
The guaranteed purchase option rider enables you to buy additional coverage at a later date, usually after a certain age or life event. It allows you to buy more coverage later in life with no medical exam required, making it ideal if you plan to start a family or undergo more lucrative career changes. This rider provides value and flexibility for young adults unsure where life will take them just yet.
Why young adults should consider adding riders
A key benefit of adding riders to your life insurance policy is that you won’t have to face additional administrative burdens and fees from managing multiple policies. Here’s why life insurance riders are integral to financial planning as a young adult:
Preparing for major life events
Riders provide additional financial security for both the unexpected and the major milestones of life. Significant life changes like marriage, buying a home, starting a family, and starting a business don’t just drastically change your day-to-day life: they also change your finances and your priorities. Life insurance riders protect your family financially while providing flexibility to choose which riders are best for your situation.
Building a financial safety net
Life insurance is a building block of long-term financial planning and security. It ensures your family is well-prepared for unexpected events all by providing long-term financial security. When you take out a life insurance policy while you are still young, you support your own long-term financial goals while protecting your loved ones today.
Choosing the right riders for your needs
How do you determine which life insurance riders are best for your situation? Here’s how you can decide:
Assessing life goals and financial situation
Your financial health can be more inconsistent when you’re young and future plans can always change. But when you assess your current financial situation, what you reasonably expect it to look like in the near future, and your plans and goals, it provides enough of a baseline to determine which riders offer the best value to you. Your physical health, location, and lifestyle also play a part in which riders would be essential coverage and which ones are not worth adding right away.
If you have a career change, plan to start a family, or have considerable student loans, these will also affect the type of life insurance riders you should prioritize.
Budget-friendly options
When you’re unsure how much you should pay for life insurance, riders are an affordable way to gain additional benefits without going over your budget for a larger coverage amount. Riders provide flexible options for staying within your budget without compromising essential coverage and protections.
Professional guidance
A professional insurance agent can tailor your life insurance policy to your specific financial situation, goals, and lifestyle. SBLI’s knowledgeable agents can help you find the right type of life insurance policy for your needs, and the riders that offer the best protection and value.
Getting started with life insurance
Life insurance can seem so complex, it’s dizzying. How do you get started learning about life insurance?
Exploring your options
- Explore insurance products: There are different types of life insurance products and riders available for different budgets, lifestyles, and needs, including young adults.
- Request a personalized quote: Request a quote using SBLI’s simple and convenient life insurance calculator so you can have additional context for how much life insurance would cost based on your coverage needs and current financial situation.
- Consult with a knowledgeable agent: Reach out to one of SBLI’s insurance agents to get personalized advice from an insurance professional with whom you can discuss your financial goals, questions, and concerns so you can a life insurance policy and riders tailored to your needs.
Financial planning for young adults
Your life insurance policy and riders aren’t merely an expense but a crucial element of financial planning and a means of achieving your long-term goals. Here’s why life insurance matters for young adults:
Integrate life insurance into your financial plan
Life insurance is an essential part of a holistic financial plan, working alongside other assets like investments, retirement accounts, and emergency savings. Just as you would budget for retirement or set aside money for unexpected expenses, life insurance should be factored into your overall financial strategy. When planning for the future, consider how life insurance can complement your goals.
Secure your future
Obtaining life insurance and planning for your insurance needs early pays off with long-time benefits, and a comfortable cushion against the unforeseeable.
Financial planning tips
- Start early: When you buy life insurance at a younger age, you can lock in a lower rate compared to taking out a policy when you’re older. This leads to immediate cost savings while establishing financial security early.
- Diversify your financial strategy: Integrate your life insurance plans with your savings and investment strategies. Life insurance accomplishes a different purpose than putting money in the stock market. Consider it equally important relative to your financial goals.
- Regular policy reviews: Your insurance needs and financial situation may not look the same five, ten, or more years from now. Review your coverage as your life changes, as your policy will need to adapt to differences like starting a family, changing careers, or entering retirement. SBLI’s insurance advisors are here to help.
You don’t need to wait until you’re older or already have children to buy life insurance. Life insurance provides powerful protection for your loved ones against the unknown and gives you peace of mind in addition to a formidable element of your long-term financial planning. Getting started with life insurance while you’re young helps you build financial security, lock in a lower rate, and determine how to adapt your insurance policy as your life changes. Riders provide adaptability and affordability in one convenient package.
Planning for the future starts today. Get a free quote online in minutes or call an SBLI agent for personalized guidance to find the right coverage for you.
Not all riders are available for all products. An Accelerated Death Benefit rider is automatically included and subject to an administrative expense charge upon acceleration. Other riders are available at an additional cost. Rider form series BC-40.1, 18-R-AXRDB, 18-R-AXDDB, BN-9, BN-50, BN-56, and 14-WOPR.
¹All Accidental Death benefits payable are subject to exclusions and limitations and may vary by state. Please refer to your policy for terms and conditions.
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