Just because you’re young and healthy right now doesn’t mean you should ignore the benefits of life insurance. Many millennials are waiting later to enter the workforce, buy homes and have children, so it stands to reason that many of them are also waiting longer to buy life insurance. Studies have shown they also overestimate the costs of life insurance and don’t think it’s as important as other monthly expenses. However, there are plenty of reasons to make life insurance a priority sooner rather than later.
Why millennials should consider life insurance
Still not sure if you need life insurance? Here are five reasons to consider it.
1. People depend on you
A lot of people think they don't need life insurance because they don't have any kids. Even if you don't have children now or aren't planning on having them in the future, you probably have people who depend on you. If you don't have a baby on the way, your life insurance death benefit can help you replace your income and offer some financial security for your spouse, as well as help pay for any higher education costs.
You might have a spouse or long-term significant other with whom you own a home. You may want to consider what would happen if you passed unexpectedly - would they be able to afford to continue living in your home?
If you're single, you can still think about those you would leave behind who might have to cover debts, or funeral and burial expenses. Your parents or siblings might be left to pay for those costs. A life insurance policy can help you cover some of them.
2. It's more affordable when you're young and healthy
The cost of a life insurance premium often depends on risk. A healthy millennial is generally considered lower risk for a life insurance company, therefore, you are more likely to get an affordable life insurance policy.
If you are a non-smoker with few or no pre-existing conditions, you might be surprised to find how inexpensive a life insurance policy can be compared to waiting until you're older.
3. Consider your cosigners
If you were to die unexpectedly, there are certain types of debt that are waived - such as student loans, for example. However, many millennials have their parents or other loved ones co-signed on loans, credit cards and even mortgages. If you pass away, your co-signers are on the hook for any remaining debts you have.
A life insurance policy can help them cover those costs. For instance, if your parents have co-signed on your credit card and are your beneficiaries, they will get your death benefit which can help pay off any debt you have on the card when you pass. Otherwise, they will have to cover those debts themselves, and not being able to pay could impact their credit score.
4. Paying for funeral expenses
Even if you leave no dependents and no lingering debts, someone will have to cover the costs of providing you with a proper burial and/or funeral. Today, the average funeral can run nearly $8,000 for a basic service1, that doesn't include any extras such as viewing. Your loved ones, perhaps your parents, siblings or significant other, will have to cover the costs of your burial. A life insurance policy, even a smaller burial policy that provides a $10,000 death benefit and typically has a very affordable monthly premium, can help pay for these costs.
5. You may need to supplement the insurance provided by your employer
Even if you have a great job with good benefits, you still need to think about life insurance. Many employer-sponsored plans offer basic group insurance coverage, but that might not be enough for your needs.
If you are the primary breadwinner for your family, chances are you will need more coverage than what’s offered on your employer-sponsored plan to cover the financial needs of your family.
Something else to keep in mind is your life insurance policy might not travel with you. If you leave your current job for a new one, you might not have that coverage anymore, leaving you exposed until you get new coverage.
If you need to brush up on your life insurance basics, or you feel the need to learn more about the different types of life insurance coverage such as Term Life Insurance, Whole Life Insurance, and Universal Life Insurance, the Protective Learning Center is here to help.