Why Millennials Aren’t Buying Life Insurance (But Should)

If you’re over the age of 34, you most likely relate to all the same thoughts the millennial generation is currently having – “I’m young, I’ve got plenty of time before I go.” Or “What do I need life insurance for? I don’t have a spouse and child to protect in the event of my death.”

These feelings are understandable. Everyone’s been young and carefree; the last thing we want to think about is our impending death. What a morbid thing to consider, right? And you’re not alone. In fact, according to a recent study conducted by LIMRA, just 34% of millennials own life insurance, making them the most underinsured generation alive today.

If you don’t have any dependents and have enough money saved to cover your funeral expenses, you might not need life insurance right now. But the truth is, despite your young age and lack of assets, this is the most optimal time to buy. It might not be quite as easy as ordering a ride from Lyft, but securing a policy is almost as easy and is surprisingly affordable.

Living the Single Life

It’s natural to assume that if you’re single, there’s no real need to invest in a life insurance policy. But recent numbers have revealed that “1 out of 5 adults between the ages 25 and 34 live in multigenerational households” with the “median share of household income contributed by those individuals at almost 25%” Consider the financial impact losing 1/4 of the household income could have on those left behind. Investing in a life insurance policy could help secure your family’s future as they’re picking up the pieces of such a devastating loss.

Your family could use the death benefits to cover:

• Credit debt
• Burial expenses
• Help support siblings with educational expenses
• Provide parents with the resources to retire

While your federally funded student loan debts are forgiven in the event of your death, many private loans still hold families financially responsible. If you carry a private loan, it’s best to check with your lender regarding the specifics of your student loan.

Married With No Children

Marriage is one of those life events that really changes the course of your existence. Love and hope is in the air as two individuals become one, ready to take on the world together. Once the wedding excitement calms down and life goes back to normal, it’s important for couples to ask themselves some very difficult questions – If I were to pass away, would my spouse suffer financial hardship? What debt would they be faced with? Would they be able to support themselves on just one income?

This life event signifies a shift in your family dynamic. This is the time to reevaluate your finances, health insurance, and life insurance to ensure your new family unit is covered in the event of any disaster.

Just Starting to Build Assets

Just on the heals of a new marriage, many couples celebrate their union by purchasing a new home. If your mortgage company requires you to purchase Mortgage Insurance Premium (MIP) or Private Mortgage Insurance (PMI), don’t be fooled – this does not pay off the mortgage if the homeowner dies. Unless you know your spouse could fully support the household bills, it’s a great idea to look into a term life insurance policy.

A term policy is an affordable solution for many young families. It ensures that loved ones are financially secure as they work to pick up the pieces after such a catastrophic event. And at less than a cup of coffee a day, you don’t have to break the bank now just to secure your future later.

A Baby on the Way

The only thing more exciting than starting a new marriage, is the birth or adoption of your first child. You put all your hopes and dreams into this tiny little bundle of joy; even sleepless nights can’t knock you down off your high.

Unfortunately, adulthood often forces us to face the bad right along with the good, and the arrival of a baby is no different. In fact, this is another life event that should spark couples to reevaluate their insurance and financial situation to ensure security in the event of one parent’s untimely death. Plan for the worst, and hope for the best.

The Bottom Line

The young and carefree attitude is something we all strive for. There’s something to be said for living life on your terms and living life to the fullest. But a little bit of preparation goes a long way, particularly when it comes to preparing for your financial future. If you’re a millennial, you’re about to embark on the most meaningful and life-changing part of your life.

If life insurance is still not a concern for you, consider these facts before making your final decision:

Life insurance is cheapest when you’re young. The older you get, the more health issues tend to pop up. The earlier in life you purchase a term life insurance policy, the cheaper premium you will pay. A 20-year, $500,000 term life policy would only cost about $16 at age 35. It will double in price at around age 45 and will be close to $65 by age 55, assuming you don’t have any health complications along the way.

Getting a policy takes time. Technology has offered us the advantage of having a wealth of information at our fingertips. While you can obtain a life insurance quote online, the buying process is a little more lengthy. You’ll need to fill out an application, answer questions regarding your health, and will have to undergo a medical examination. While none of this is difficult, you do want to remember that your insurance policy won’t take effect until the process is complete, which could be anywhere from a couple weeks, to a couple months.

Take the time to work with an agent once you’ve made your decision to buy. Making the decision to invest in life insurance is just the first step. When you’re ready to make this investment, you want it done right. This means understanding your coverage and term options and ensuring your policy aligns with your overall goals. Learn from the mistakes of others and consult with a licensed life insurance agent to ensure your policy is designed with both short and long-term goals in mind.

As you enter adulthood and start trying to set up for your financial future, there are a million things to consider. Be sure to partner with an agent that is knowledgeable and can guide you through the process. Don’t be afraid to ask questions; it is our job to ensure you understand all of your options as you decide on a policy that will be with you for many years to come.