Haris Ashley
Millennials are flocking to buy life insurance, and it's about time! Life insurance is an important financial decision that everyone should make with confidence. While it's not the most exciting purchase, it's a necessary one, especially if you have people depending on you financially. This goes beyond just having children; millennials should also consider their spouses, parents, and even siblings who might be left to cover debts, funeral expenses, and burial costs. The good news is that, as a millennial, you're likely to get an affordable life insurance policy as you're considered low-risk. You can even purchase a policy without a medical exam or blood tests, thanks to recent changes in the industry. So, if you're a millennial reading this, ask yourself: Would my death have a financial impact on the people in my life? If the answer is yes, then it's time to start shopping around for a policy that suits your needs.
| Characteristics | Values |
|---|---|
| Cost of a premium | Depends on risk; generally, the healthier you are, the lower the cost |
| Who needs life insurance | Parents of minor children, those with co-owned debt, and those with dependents |
| How much coverage | Financial planners recommend at least five times your salary in coverage |
| How to buy | Research and purchase online; some companies require a paper application and health exam |
| Types of policies | Term and permanent; permanent policies include universal, variable, and whole life |
| Group life insurance | Coverage provided by your employer, often basic and non-portable |
| Burial policy | A smaller policy that provides a $10,000 death benefit to cover funeral costs |
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What You'll Learn
- Millennials are more likely to get an affordable life insurance policy
- Life insurance can cover funeral costs, which average $7,000 to $9,000
- Millennial parents should consider permanent life insurance
- Millennial professionals should consider life insurance to secure their family's future
- You can research and buy life insurance entirely online
Millennials are more likely to get an affordable life insurance policy
Millennials are often young and healthy, which means they are low-risk customers for insurance companies. This makes them more likely to get an affordable life insurance policy. If you are a non-smoker with few or no pre-existing conditions, you may be surprised to find how inexpensive a life insurance policy can be.
Life insurance is a contract between you and an insurance company. You pay insurance premiums in exchange for coverage. If you die while the policy is in effect, the insurer pays out a life insurance death benefit to your beneficiaries. The cost of a life insurance premium often depends on risk. A healthy millennial is generally considered lower risk and can therefore get a more affordable life insurance policy.
There are two basic types of life insurance: term and permanent (whole life insurance is an example of a permanent policy). Term life insurance offers a payout if you die. Permanent life insurance, which includes universal and variable life, essentially creates a savings account for you where you can earn a minimum guaranteed interest or a dividend. These earnings are generally tax-deferred and are referred to as the "cash value". Over time, this builds up and you can borrow against it or even use it to cover your premiums. However, permanent policies can cost up to 10 times more than term policies, which can lead to missed payments or abandonment.
Many millennials put off buying life insurance, but it is important to make it a priority, especially if you have people depending on you financially. If you have a baby on the way, your life insurance death benefit can help you replace your income and offer financial security for your spouse and children. It can also help pay for funeral and burial expenses, which can cost nearly $8,000 for a basic service.
You may be able to get life insurance through your employer, known as group life insurance. If your employer offers this coverage for free, there is little reason not to accept it. However, you may find that you need to purchase additional coverage on your own, as employer-sponsored plans often only offer basic group insurance coverage. Many employer life insurance plans offer very basic coverage, and the policy may not be portable if you leave your job.
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Life insurance can cover funeral costs, which average $7,000 to $9,000
Life insurance is a financial safety net that millennials should consider investing in. While it is true that millennials are generally young and healthy, it is still important to be prepared for unexpected events. The COVID-19 pandemic has highlighted the importance of life insurance, as many individuals have experienced loss and have begun to plan for the future.
Funeral and burial expenses can be a significant financial burden, averaging between $7,000 and $9,000. A life insurance policy can help cover these costs, ensuring that your loved ones are not left with a financial burden during an already difficult time. This is especially important if you have co-signed loans, credit cards, or mortgages with family members or loved ones.
The cost of a life insurance premium often depends on risk factors, and as a millennial, you are likely to be considered low risk. This means that you can often obtain a life insurance policy at a very affordable rate. If you are a non-smoker with few or no pre-existing health conditions, you may be surprised at how inexpensive a policy can be.
It is worth noting that life insurance policies can vary significantly, and it is important to find one that suits your specific needs. Many employer-sponsored plans offer basic group insurance coverage, but this may not be sufficient for your requirements. You may need to purchase additional coverage or opt for a different type of policy, such as permanent life insurance, which includes universal life, variable life, and whole life options.
By investing in life insurance, you can ensure that your loved ones are financially protected in the event of your death. It is a way to provide for your family and relieve them of the financial burden of funeral costs, allowing them to focus on grieving and healing.
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Millennial parents should consider permanent life insurance
As a millennial parent, you may have various financial commitments, including supporting your children and planning for their future. Permanent life insurance can be an essential tool to ensure your family's financial security in the unfortunate event of your demise. Permanent life insurance, including universal life, variable life, and whole life insurance, offers comprehensive coverage throughout your life. Here are several reasons why millennial parents should consider permanent life insurance:
Financial Security for Your Family:
The primary purpose of life insurance is to provide financial protection for your loved ones after you're gone. As a parent, you want to ensure your children's well-being and security, and life insurance can help replace your income, offering financial stability for your family. It can help your spouse or co-parent handle expenses, pay for your children's education, and maintain their standard of living.
Burial and Funeral Expenses:
Funeral costs can be substantial, averaging between $7,000 and $9,000, and these expenses continue to rise. A permanent life insurance policy can help alleviate the financial burden on your family by covering these end-of-life costs. This ensures that your loved ones can grieve without the added stress of unexpected expenses.
Peace of Mind:
Permanent life insurance provides peace of mind, knowing that your family will be taken care of financially if something unexpected happens to you. It allows you to rest assured that your children and spouse will have the resources they need to cope with the loss and continue their lives with financial stability.
Long-Term Protection:
Permanent life insurance offers coverage throughout your life, unlike term life insurance, which only provides a payout upon death. Permanent policies, such as whole life insurance, create a savings account where you can earn guaranteed interest or dividends. These earnings are tax-deferred, and you can borrow against them or use them to cover premiums or other expenses.
Affordability for Millennials:
As a millennial, your age and health can work in your favour when it comes to the cost of life insurance. Generally, younger and healthier individuals are considered low-risk by insurance companies, resulting in more affordable premiums. If you're a non-smoker with no pre-existing conditions, you can enjoy even lower rates.
When considering permanent life insurance, it's important to shop around, compare rates, and find a policy that suits your specific needs. You can also take advantage of digital tools and online platforms that many insurers now offer, making it easier to research, compare, and apply for life insurance from the comfort of your home.
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Millennial professionals should consider life insurance to secure their family's future
Millennials are waiting longer to buy homes and have children, so it's no surprise that many are also waiting longer to buy life insurance. However, there are several reasons why millennial professionals should consider getting life insurance sooner rather than later to secure their family's future.
Firstly, life insurance can provide financial security for your family in the event of your death. This is especially important if you have dependents, such as a spouse or children, who rely on your income. A life insurance payout can help replace your income, cover any outstanding debts, and provide for your family's future needs.
Secondly, even if you don't have any dependents, someone will still need to cover the costs of your funeral and burial expenses, which can be significant. A basic funeral can cost nearly $8,000, and these costs may fall to your parents, siblings, or other loved ones. A life insurance policy can help ease the financial burden on your family during an already difficult time.
Thirdly, as a millennial professional, you may have accumulated assets and debts over the years, such as a mortgage or student loans. In the unfortunate event of your death, a life insurance policy can help ensure that these debts are not passed on to your loved ones.
Finally, as a millennial, you are in a unique position to benefit from lower life insurance premiums. Insurance companies consider healthy millennials with no pre-existing conditions to be low-risk, which translates to more affordable policies. By purchasing life insurance now, you can lock in lower rates that will continue throughout the life of the policy.
When considering life insurance, it's important to shop around and compare different providers and policy types, such as term and permanent life insurance. You should also review any existing coverage you may have through your employer and determine if it meets your needs or if you need to purchase additional coverage. By taking the time to assess your options, you can ensure that you have the right level of protection in place to secure your family's future.
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You can research and buy life insurance entirely online
Millennials are comfortable buying everything from groceries to cars online, and the pandemic has accelerated the shift to digital for life insurance providers. It's now easier than ever to research and buy life insurance entirely online. You can gather quotes from multiple insurers, research potential providers, and even go through the application and delivery process without ever leaving your home. Many insurers have dropped the physical examination requirement, meaning you can purchase a life insurance policy without a medical exam or blood tests.
Exam-free policies typically have faster underwriting times than traditional policies, and they offer the convenience of avoiding an additional appointment. You can also compare life insurance quotes online to find an affordable policy that suits your needs and budget. This is especially useful for millennials, who may be buying life insurance later in life than previous generations, as they are waiting longer to buy homes and have children.
When researching life insurance online, it's important to find a company that understands your specific needs. In the past, life insurance companies would cater to people based on their type of occupation. Today, many insurance providers will focus on your lifestyle and health and tailor their services and policies to specific groups such as new parents or individuals with pre-existing conditions. You can also review the coverage options offered by your employer to determine if you need to purchase additional coverage on your own.
It's recommended that you review your life insurance policy annually or whenever you experience major life events such as marriage, the birth of a child, or a significant change in your financial situation. This ensures that your coverage remains relevant and adequate. By purchasing coverage while you're young and healthy, you can also benefit from lower rates and long-term financial security.
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Frequently asked questions
If you have people depending on you for financial support, you need to be prepared to provide it, even if something unexpected happens to you. Life insurance is one of the easiest ways to do that.
Financial planners often recommend getting at least five times your salary in coverage. For example, if you earn the average millennial salary of $50,000 per year, you should consider a starting point of $250,000 in coverage.
There are two basic types of life insurance: term and permanent. Term life insurance is pure insurance that offers a payout if you die. Permanent life insurance, which includes universal, variable, and whole life, creates a savings account for you where you can earn a minimum guaranteed interest or a dividend.
You can buy life insurance directly from an insurance company or through an insurance broker or financial advisor. You may be able to get life insurance through your employer, known as group life insurance, often offered for free as an employment benefit.
