8 Reasons Why Millennials Should Consider Life Insurance
If you’re a millennial, buying life insurance is probably one of the last things on your mind. Most millennials today are focused on their careers and financial independence first and settling down and starting a family later. But even though most millennials don’t have families to support, buying life insurance could make sense in many cases. Here are 8 Reasons Why Millennials Should Consider Life Insurance.
8 Reasons Why Millennials Should Consider Life Insurance
- Your Young and Healthy – Let’s face it, your 20’s and 30’s are the prime of your life from a health standpoint. This is the time when you have the best chance of getting the lowest rates on life insurance. Waiting till your late 30’s or 40’s could mean higher rates. Not only are you older, but you have a better chance of developing some sort of health issue that could push your rates higher.
- Your Employee Sponsored Coverage is Not Enough – Many companies today offer smaller amounts of life insurance through group plans. Some companies will even include free coverage up to a certain amount like $50,000. But before you settle for group plan coverage, there are a few important things to know. Group plans can limit your amount of coverage, most group plans are not portable if you leave your job and group plan rates increase as you get older. Read more about employer sponsored life insurance.
- You Have School Loans and Other Debt – Many millennials are graduating with student loan debt. In most cases, a co-signer such as a parent was used for these loans. In fact, in a 2014 survey Experian found that two-thirds of millennials had used a co-signer for student loans — which makes that person liable for any shared private debt you can’t pay. If you were to pass away unexpectedly, would you want to stick your parents with paying your student loans? A small term policy could take care of student loan debt and any other outstanding debt that you might have if you were to die unexpectedly.
- You Want a Proper Funeral Don’t You? Let’s face it, when you’re in your 20’s or 30’s you’re not thinking about your mortality. It is most likely that you will live a long life as life expectancy for both men and women has risen over the years due to improvements in medicine. But you never know when the unexpected could happen. A traditional funeral costs $7,000 to $10,000 according to Parting.com. Having a small amount of life insurance coverage in place could take the burden of your funeral costs off of your family’s plate.
- You Plan on Getting Married – As mentioned before, millennials are waiting longer to get married than other generations. Just because you are not married now, doesn’t mean that you will never get married. You may already have a live-in boyfriend/girlfriend with whom you share expenses. Locking in a low rate now before you get married could make a lot of sense.
- You Have Dependents, You Just Don’t Realize it – When most people think of dependents for life insurance purposes, they think of children. That’s not always the case. As mentioned in Reason 5, many millennials are sharing expenses with a live in boyfriend/girlfriend. This may include sharing credit card debt, auto loans, rent or even a mortgage if you buy a house together. Life insurance can leave your surviving partner with the financial safety net they need if you were to pass away unexpectedly. In some cases, millennials are faced with taking care of aging parents financially. Life insurance could give your parents the financial cushion they need if you weren’t around to provide for them.
- You Want to Leverage Riders for More Comprehensive Coverage – Life insurance policies have come a long way over the past decade. Some term policies even offer life insurance with benefits for chronic or critical illnesses. In other words, these policies can offer benefits while you are still alive. Buying a policy with a chronic and critical illness rider could add a few valuable layers of protection.
- You Would Like Savings Outside of Your 401K – There are some cases where permanent coverage such as whole life or universal life might be a good option. Permanent policies provide a death benefit as well as a savings component. Permanent policies provide tax-deferred savings that can be drawn upon at retirement on a tax-free basis in most cases. If you are going to use life insurance for retirement planning, make sure you follow our strategy for maximum cash value growth.
Sample Life Insurance Rates for Millennials
According to a 2015 Insurance Barometer Study released by LIMRA and the nonprofit Life Happens, 80% of consumers misjudge the price for term life insurance with Millennials overestimating the cost by 213%. The fact is that life insurance rates have never been more affordable. Here are some sample rates for male and female non-smoker applicants that qualify for the best health rating. Annual rates are for 30 years of coverage.
| Male | $100,000 | $150,000 | $250,000 | $500,000 |
|---|---|---|---|---|
| Age 22 | $142.99 | $184.49 | $227.50 | $370 |
| Age 25 | $142.99 | $184.49 | $227.50 | $375 |
| Age 30 | $146.99 | $190.49 | $237.50 | $394 |
| Female | $100,000 | $150,000 | $250,000 | $500,000 |
|---|---|---|---|---|
| Age 22 | $133.99 | $170.99 | $189 | $295 |
| Age 25 | $133.99 | $170.99 | $189 | $300 |
| Age 30 | $135 | $187.50 | $205 | $325 |
Are You Making Life Insurance a Priority?
A recent study by LIMRA showed that 60% of millennials surveyed said internet, cable and cellphone bills are higher priorities than life insurance. It also found that about 3 out of 10 millennials said saving for a vacation is more important than buying life insurance. The fact is that most millennials need to make life insurance a greater priority in their overall financial plan. In many cases, a small term policy can make a huge difference to your loved ones if you passed away. Rates for life insurance have never been lower. You can see that even a small term policy is affordable for almost any budget. If you are a millennial and don’t own life insurance, think about the financial impact of your death on your family. It’s time to make life insurance a priority in your overall financial plan.
About Us
Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients. We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage. Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com.
