Most millennials are concerned with paying off debt or saving to buy a home. If you’re a millennial, the chances you’ve already invested in a private life insurance policy are probably low. The share of Americans covered by life insurance slid from 63% in 2011 to 52% in 2021 — and the most pronounced decrease has come from younger generations, per LIMRA’s study – Facts About Life 2021.
It makes sense — you’re young and healthy, and extra money goes towards the latest iPhone, smart home device, or international travel. But, with the last 18 months forcing even younger generations to confront their mortality, the same study shows 48% of millennials are reportedly planning to buy within the next 12 months. Here’s why now is the time for millennials to prioritize life insurance:
Buying Life Insurance Earlier Can Lock in Lower Premiums
One of the main reasons millennials have avoided life insurance is because it has traditionally been a pain to buy. Fortunately, technological advances have made it easier to purchase almost anything. For example, virtual assistants and e-commerce sites make shopping for groceries and ordering takeout easy. Same-day delivery is no longer a perk but an industry standard that even the life insurance industry is beginning to embrace.
Signing up for life insurance isn’t difficult now that there are streamlined processes and direct-to-consumer platforms that can allow applicants to receive a personalized policy of up to $1 million approved and delivered on average in ten minutes or less — no doctor’s visits or in-person meetings are necessary.
For example, a 30-year-old healthy female could potentially get a 10-year, $500,000 term life policy for as low as $22 a month. However, the cost of term life insurance increases as a person gets older, making it important for millennials to get a policy sooner rather than later.
Protect your Family from Financial Burden
If a millennial with a growing family passes away, the family will suffer a loss of income. The surviving members may struggle to continue paying basic living expenses. A life insurance policy with a death benefit could help the surviving family be financially secure for a few years or longer. It could be enough time until the widowed spouse can earn income on their own and the children are financially independent.
The money can be used to continue paying for expenses such as childcare, food, and housing. The money may also be used to help pay off any remaining debt, such as medical expenses, car loans, student loans, or a mortgage.
Employee coverage might be too low
Some employers include life insurance as a benefit. The benefit will usually only match one year of a person’s current salary. If a millennial only makes $40,000, that means the death benefit the family will receive might only be $40,000. Life insurance experts generally recommend that individuals should get at least 10x their income in life insurance coverage. Some experts also advise adding $100,000 for each child in the family.
COVID has raised awareness about the important role life insurance plays in families’ financial security, so it’s time for millennials to consider getting life insurance sooner rather than later.
Pay for funeral expenses
Some millennials may have no debt remaining or dependents to take care of when they pass away. Even without those costs, there will still be the cost of covering a funeral. The average funeral costs anywhere between $7,000 and $11,000. Millennials can get final expense insurance to help the surviving family avoid the stress of paying for a funeral and focus on grieving. These policies usually have a smaller death benefit, which means the premium will be more affordable.
The Bottom Line
Fidelity Life offers a variety of term life insurance for millennials. Life insurance shoppers can discuss their options with an agent or conveniently shop for online life insurance quotes. Shoppers simply need to answer a few questions before being quickly matched with a policy that suits their needs.