If you’re a millennial, the chances you’ve invested in a private life insurance policy are pretty low. It makes sense- you’re young and healthy, and extra money goes towards a smart home device, the latest iPhone, or international travel. With the latest adverse effects of COVID-19, younger generations have confronted their mortality. According to a life insurance consultant, 48% of the millennials are now planning to buy life insurance within the next 12 months.
Here’s why now is the time for millennials to prioritize life insurance:
Life Insurance Policies are Cheaper for the Young and Healthy
Life insurance is cheaper and easier to maintain if you buy it while still young and healthy. As you age, your health tends to age too. Aging brings a whole host of medical complications that you may not experience when in your 20s. Medical complications like depression, diabetes, or arthritis can make the process of obtaining life insurance difficult which makes it more expensive.
To drive this point home, if a healthy 25-year-old were to buy a term life insurance policy right now, the monthly costs would be just $30. This is based on quotations from companies like Protective, AIG, and Banner William Pen. However, if a 45-year-old were to seek coverage, the monthly premiums will cost five times higher, ranging from $164 to $169 monthly from the same insurance companies quoted for a 25-year-old.
You can get more coverage for less. Larger policies are much cheaper to buy when you’re younger. Your needs change from time to time, and buying life insurance coverage while you’re young will help you save more money than if you waited until later in life to purchase coverage.
Life Insurance policies are Readily Available for the Young
Life insurance policies are easier to qualify for. When you’re older and are saddled with health challenges, you may not qualify at all. When you’re younger, you may be able to secure a policy without undergoing a medical evaluation. When you get older, life insurance companies will demand you undergo an exam, conduct blood tests, or even request up to five years of your health records just to get any approval.
As a bonus, when you get life insurance coverage while young, you are guaranteed protection even after serious health issues arise. This means that even after developing life-threatening health conditions later in life, you will not have to worry about being unable to obtain life insurance.
Some policies are guaranteed to be renewable after the end of term, therefore, ironing out issues related to worrying about qualifying later if a medical condition develops.
Unfortunately, when we pass away, our debts do not always go away. Even if you don’t have a family or mortgage, you may have other debts like student loans. By purchasing a life insurance policy while young, you can make sure that your family will not be left with the burden of paying these debts.
If you want to make sure that your parents and close relatives do not have to pay off your debt in your absence, a life insurance policy will give them money to help pay off your loans.
A life insurance policy can be used as a lucrative investment vehicle to establish a significant cash value over time. This is good for you if you are behind on saving for your retirement.
Cash-value life insurance or permanent life provides you with a death benefit that can be used to build cash. The premiums you pay can be utilized to establish an investment portfolio that can help you accumulate wealth. As you grow older, the cash in the policy can be tapped to cover retirement living expenses.
Life insurance enables you to accumulate wealth tax-free. This is the most overlooked and misunderstood benefit of permanent life insurance. When used properly, a permanent life insurance policy can provide tremendous value to your long-life savings goals.
The concept of Financial Independence and Retiring Early is hot amongst millennials, and the utilization of a permanent life insurance policy fits perfectly with the strategy. This is applicable due to its ability to remove funds without penalties or taxes before the age of 59 and a half.
A permanent policy provides the ability for you to grow funds on a tax-advantage basis and withdraw the funds in the future without incurring any additional expenses when you withdraw them using the proper strategy. The sooner you begin the premium contributions, the greater the account value.
Secure your Business After Death
Millennials are one of the most entrepreneurial generations in America. According to a survey conducted by GoDaddy, 3000 Americans including 1,000 millennials lead the pack in entrepreneurial efforts. 30 percent were reported as small business owners or have a side hustle. Securing life insurance can be a way to protect your legacy by ensuring that your business survives long after you’re dead.
If you share your life insurance with your dependents, they can use the cash benefit as a transition to keeping the business afloat during your absence.
If all the above reasons are not convincing enough, ask yourself this one last question: Would anyone suffer a financial burden when you’re dead? If yes, then you require life insurance protection. This will secure your family and ensure enough financial protection.