Young adults go through unique financial challenges that can be very frustrating in life. There is the college debt to think about, and sometimes getting a job can take longer than you might expect. Taking care of several financial obligations means most people this age are not even thinking about things like life insurance. Research has shown that those below the age of 35 are highly likely not to have health and life insurance compared to the older generations.
It can be easy for younger generations to assume they don't need life insurance because, well, most young people feel like they are invincible. Unfortunately, life can have different plans. There are so many good reasons why everyone should consider buying life insurance for millennials.
Life Insurance for Millennials is Cheap
Contrary to what you might think, life insurance is actually much cheaper when you are younger. When coming up with the estimates, factors such as medical conditions and overall health will be considered. Most young people tend to pay less when it comes to life insurance compared to older people. It can even be cheaper if there is no pre-existing condition and if they don't smoke. Waiting till you get to your 50s or 60s to buy life insurance could result in higher premiums which can be much more costly in the long run. Shopping for insurance now can help in locking in good rates which will save you on a lot of money in the future.
Funerals Costs and Debt
We are all going to die at some point. Funerals can be costly and you don't want to leave your family with a huge financial burden when you're gone. It is estimated that a funeral can cost up to $10,000. Even if you're planning on an unconventional funeral, there is someone that will have to foot the bill. Having a life insurance cover ensures that the family doesn't have to worry in case the worst happens to you.
Someone will eventually have to pay for many of the debts that you accumulated when you were still alive. Millennials are burdened with heavy student's debt and it can take years to pay up. If something was to happen to you, depending on the type of student loan, the burden may be transferred to your next of kin which is a big financial blow at a time when they will already be dealing with the death of a family member.
Security Net for Your Children
As every parent knows, having kids means that you're responsible for their lives. You want to make sure that your kids will be taken care of should anything unforeseen happen to you. This is particularly important if your significant other is a stay-at-home parent and doesn't have any meaningful source of income. Even stay at home spouses need life insurance too, since they provide services in raising your children that you would have to pay for should they no longer be around, like daycare and other things.
Your Work Offered Policy Probably Isn't Enough
The life insurance policies commonly offered through workplaces may not be a comprehensive one that covers the whole family. In such a scenario, you should ensure there is a backup plan just in case something happens. Some insurance covers allow you to borrow against the medical costs should you find yourself in such a situation. Sometimes what the employer is offering might not be the best life insurance for millennials and their families.
What are the Types of Policies Millennials Should Consider?
When it comes to life Insurance, it basically waters down to two categories: Term and permanent, although there are different variations.
- Term Life: This is usually the most basic and considered the inexpensive option. The term policy is written for a specific period of years. There is the option of renewing the cover at the end of the term, depending on circumstances. The premiums tend to get more expensive as you grow older.
- Whole Life: With whole life insurance, you're permanently covered and there is combined protection with the cash accumulation value component. You have the option of borrowing against your policy's cash value. The outstanding loans accrue interests.
- Universal Life: Such a policy is flexible when it comes to facing value and premiums. There is the option of increasing, decreasing or deferring premiums with certain limits. It should be noted that this has the potential of decreasing the policy's death benefit.
- Variable Life: With this option, there are fixed premiums but you get a variety when it comes to stock options. The cash value can be invested in different types of stock. You don't get any guarantees when it comes to cash values.
Tips for Getting Life Insurance
You should start by having a financial plan in place. This will help in budgeting so that you know how the money is being used. You can cut down on luxuries just to ensure that you can afford to pay for life insurance. Another big thing you can do to help your cause is to talk to a life insurance agent and get expert help on finding the best life insurance for millennials today.