Life Insurance for Millennials: Why You Should Start Early
Millennials are the generation known for delaying things like marriage, home ownership, or having a baby. Instead, they focus more on experiences during their younger years and prefer to travel, try different career paths, and, overall, have more fun. Life insurance may not sound fun, but delaying it may be especially costly, and in the next few chapters, we will explain why.
1. Lower Premiums
One of the main things that keep people from getting life insurance is the misconception that it’s expensive and they cannot afford it, or there are better ways to spend their money. However, there is nothing more valuable than knowing that somebody has your back. Besides, the sooner you get it, the cheaper it’ll be. Some types of life insurance allow you to lock in the premiums, and it’s much better to do so when you are younger and healthier. So, procrastinating getting your life insurance is counterintuitive if your goal is to save money.
2. Financial Protection for Loved Ones
Assuming that life insurance is only for those with a spouse or children is clearly misleading. Millennials may not have a family yet, but they have financial responsibilities like student loans, credit cards, or co-signed loans. In fact, millennials tend to have higher levels of debt than previous generations, as a greater proportion have acquired a higher level of education. So, getting life insurance is a safe way to make sure our financial obligations will be taken care of no matter what.
3. Plans for the Future
Even if marriage and children are not your next goals, life insurance may be a good foundation for your future plans. Some types of life insurance have a cash value component, and by purchasing them early on, you will accumulate valuable assets.
Types of Life Insurance For Millennials
1. Term Life Insurance
Term life insurance provides coverage for a set period of time, typically 10 to 30 years. It’s affordable and thus suitable for those looking for life insurance on a budget. Also, if your goal is to get coverage for temporary needs like a mortgage or a student loan, then term life insurance is the right product for you.
2. Permanent Life Insurance
Permanent life insurance provides lifelong coverage for the insured. As long as the premiums are paid, the coverage will be in place. If the policyholder passes away, permanent life insurance provides both a death benefit and a cash value component. Premiums for this type of insurance are higher than those of term life insurance, however, it offers permanent protection and peace of mind for your loved ones. Let’s not forget about the cash value component, which can be a valuable long-term investment.
Tips for Buying Life Insurance as a Millennial
1. Assess your Needs
Getting life insurance is a wise financial decision, however, there are other decisions you need to make properly to make the most of your coverage. That’s why, before even purchasing coverage, you need to assess your family's financial needs. It means calculating all the debt that your family owes, plus living expenses you would like to be taken care of. This number can vary depending on multiple factors like how big your family is, how old your children are, what your lifestyle looks like, and how much money you spend to support that.
2. Compare Quotes
After you know what you are looking for, get quotes from a few trusted insurance providers and compare them for the best deal. Online tools for comparison can help you make a decision quicker, but if you don’t know what parameters you should look at and what features to prioritize, talk to a professional to make sure you get the best coverage within your budget.
3. Review and Update Regularly
Significant life events change everything, including our financial needs. Thus, you shouldn’t assume that once you choose the policy and coverage, it should be all good for the rest of your life. Review your insurance coverage regularly, or at least after major shifts in your life to make sure it meets your current needs.
4. Consult a Financial Advisor
You may be tempted to navigate the world of life insurance yourself, but experts know the nuances that make a big difference. After all, there are so many riders and features that you may get confused and end up getting less than your money could buy.
The death benefit you choose is extremely important and should be properly calculated. While you may do some rough math and come up with a number, there may be essential expenses left out, that you don’t want to happen. Also, how are you going to calculate the effect of inflation on all the expenses you want to take care of in the future? The amount you think is sufficient now may be hardly enough to cover the basic needs in 20-30 years. So, do yourself a favor, and consult with a professional. That will rid you of so much hassle.
In conclusion, life insurance is a valuable financial tool that can provide millennials with essential protection and peace of mind. By starting early and investing in the right policy, you can secure your financial future and protect your loved ones from life's uncertainties. Don't wait until it's too late - start planning for your financial security today.