Life Insurance for Millennials
Everyone has financial challenges that impact their lives daily. A millennial is no exception to these concerns. We think of student loans, debt, life costs and much more. However, a recent study found that those under 30 rarely consider health or life insurance; it is understandable that when you are just beginning your career and are in great health you might look at these insurance policies as a waste of time and money. Some internal conversations might revolve around “I never get sick,” “I don’t have a family so there is no need to leave money for anyone,” “I will get life insurance in a few years.” Although investing in health insurance does not seem important to you now, it is.
Best Time to Get Life Insurance
Though it is argued that when you are single you may not need life insurance, if you can afford the monthly rates by all means go ahead and get it, especially if you do not intend to stay single all your life. The younger and healthier you are, the better the rates.
If this time has passed for you and you are married or raising a child, then life insurance is more important than ever. Look for the policy that suits your particular life situation best.
Why is it Important for Millennials?
Funerals are Expensive
No matter the type of ceremony, someone will have to pay for it. A life insurance policy that is not too steep can cover your funeral costs and not leave the burden on a loved one.
Your age and physical health are major factors that are considered for life insurance premiums. This means that if you have healthy habits and no major medical conditions your premiums will be smaller and your coverage amount will be higher. This is due to you being less of a liability to an insurance company at this stage of your life.
Reduce the Burden of Debt
Student loan debts hang heavily on graduates today. If anything were to happen to you before you finish paying, it would fall on either your parents or wife. You could also have a joint mortgage or credit card debt with your wife, would she be able to manage on her own?
Built in Savings
For millennials, the term life policy is the most popular due to low premiums and high coverage. However, it is only valid for the amount of years that you sign up for. When the term expires then you will have to be re-assessed and your premiums will most likely go up.
The other type of policy is a whole life policy. This is more expensive at the beginning but will cover you for the entirety of your life. It also doesn’t require you to take an additional physical if you have a health change in the future. The premiums are also tax free and a percentage go into a cash account that you can borrow on in the future. As a millennial, there are likely quite a few years to grow these savings.
What to Look for in an Insurance Company
Is it stable?
When it comes to life insurance it is a long term agreement. You want to ensure that the company you go with has a strong track record and is backed by a major organization.
- Check their current ratings with AM Best, S&P 500, Weiss and Moody’s.
- Search to see if there is a change in ratings from year to year.
- Look over their financial statements for continuity and profitability.
What are their Policies?
Quite a few of the bigger insurance companies offer a full menu of insurance products. This may not seem important now, but as the years go by, your needs will change. If you could easily upgrade or downgrade as necessary it would help. You also want to ensure that the premiums are within your budget.