Growing up, many of us probably thought of life insurance as being an older person’s product, meant to protect your loved ones as you near the latter years of life. This couldn’t be further from the truth, though. In fact, life insurance can provide valuable protection to your family whether you’re 22 or 82.
As a millennial, life insurance may or may not be on your radar yet. However, there are a few important things to keep in mind when deciding whether or not to buy a policy and what exactly you should buy.
Why Millennials Need Life Insurance
Whether you’re on the older side of the millennial spectrum (in your 30s, turning age 40 this year) or just barely into the younger end (age 25), life insurance is a beneficial product worth considering.
Regardless of your age, you should seriously consider buying life insurance if you have:
- A spouse who depends on you financially
- A mortgage
- Shared debt
If you are married and your spouse relies on your income for things like car payments, house payments, or shared credit card debt, life insurance is an important purchase. Even if they could manage expenses on their own, though, life insurance can be a great way to provide for them in your absence, for years to come.
If you already have children, life insurance can provide for their daily expenses as well as future costs. This includes everything from private school, college tuition, wedding costs, or the down payment on their first home.
And then, there’s debt to consider.
According to a Business Insider study, nearly 45% of millennial adults are saddled with student loan debt. While some types of student loans would be forgiven in the event of your death, others — such as Parent PLUS loans — would simply fall on the shoulders of your co-signer. Buying life insurance can help protect those you love from this burden.
This is the same with credit cards, auto loans, and personal loans, too. If you were to pass away, these balances would either be the responsibility of your co-borrower (assuming you have one) or claims could be made against your estate. Life insurance coverage prevents these debts from becoming a burden to your family.
What Type of Life Insurance Millennials Need
Put simply, you have two types of life insurance to choose from: temporary or permanent.
Temporary, or term, life insurance is generally the most affordable and provides a set benefit for a specific number of years. If you have a 30-year mortgage, you can buy 30-year term coverage. If your children are babies now, a 20-year policy can protect them until they are grown and out of the house.
Permanent coverage can either be whole life or universal life, and is intended to protect you for the rest of your life. It’s typically 5x more expensive than term coverage, in fact, but offers peace of mind that you will always be insured, no matter how old you get or what life throws your way.
Choosing between term and whole life coverage depends on your specific situation, needs, and even your current budget. There are pros and cons to both, so be sure to consider all of your options before buying.
Not sure what type of coverage is right for you? Leap Life agents are available by phone to answer any questions you may have about the different policy options, as well as offer personalized quotes when you’re ready to buy.
How Much Life Insurance Coverage Millennials Should Buy
Calculating how much life insurance coverage you need can be a personal process, depending on how old you are and where you are in life. A single 25-year-old millennial doesn’t usually need as much coverage as, say, a 35-year old with a family and a mortgage.
When it comes to calculating life insurance needs, take into consideration your:
- Family status (significant other, children, parents, and even siblings)
- Debt (home mortgage, credit cards, loans)
- Existing assets
- The legacy you want to leave behind
While it’s important to buy what you need now, you should also consider how much coverage you may need in the coming years. If you plan to buy a home, get married, have children, or start a business, it could be smart to buy a bit more life insurance coverage than you actually require today. That way, you are able to lock in better rates while you are younger and healthier.
Life insurance is a valuable financial product that would protect those you care about if you were to suddenly pass away. While you aren’t always thinking about death and life insurance in your 20s and 30s, this can actually be the perfect time to buy — especially if you want to lock in the best possible rates for coverage.
LeapLife makes it easy to get matched with A (or higher) rated insurance companies that can protect those you love most. Coverage is available for up to $5 million and with terms as long as 40 years.