Studies show that young people overestimate the cost of life insurance and a large portion of those between the ages of 20 to 30 believe they won’t qualify. Millennials, we’re here to tell you that getting life insurance is easier and cheaper than you think.
You Need Life Insurance
Ask yourself this question: money-wise, would someone be worse off if you died tomorrow? If you have people dependent on your income or people would be stuck paying your debts, then the answer is yes and you need life insurance.
You should also consider getting life insurance if you have private student loans. Federal student loans are discharged if the student dies, but rules vary depending on individual lenders for private student loans. Parents, siblings, or spouses who co-sign private loans may be responsible for your debt if you die.
You Don’t Have To Be Rich To Afford It
An insurance questionnaire asked respondents how much a $250,000 term policy for a healthy 30-year-old would cost per year. The median response was $500 – three times more than the actual cost of $160. Millennials aged 18 to 36 gave responses that were even more skewed: 44% estimated it would cost $1,000 or more.
Many people, particularly young people, don’t consider life insurance because they think it’s too expensive. This could not be further from the truth. Millennials have a financial incentive to buy now while they are young. As you get older and your health declines, insurance premiums increase.
The study also found that 42% of Millennials think they would not qualify for coverage, compared with 24% of Generation X, 20% of baby boomers, and 15% of seniors. Ironically, out of all these age groups, millennials are the most likely to qualify for the best rates.
What Kind Of Insurance Should A Millennial Buy? How Much?
There are two main types of life insurance: term and permanent. Term life insurance covers a period of time, like 20, 30, or 50 years. Permanent insurance lasts your whole life, but often costs a lot more and has features you may not need. Term life, such as Juniper Life Insurance, is the least expensive and least complicated – making it perfect for younger families.
Picking term coverage requires a little bit of planning. You should buy a term that covers you until your kids are grown, your home is paid off, and you’re financially established. One effective way to find out how much coverage you need is to count your expenses. Get a policy that covers your mortgage, your car loans, and any future college costs. Be sure to take income replacement into account as well. Many experts suggest purchasing enough coverage to replace seven years of income.
Where Should You Buy Insurance?
Some of us get life insurance through work, but the free coverage given to employees probably isn’t enough for you, your spouse, and your kids. Also, workplace coverage often ends the moment you leave your employer.
If you’re healthy, your best bet is to shop around and find some quotes online. You may be considering going to an insurance broker and speaking with an agent, but be aware that brick and mortar brokers are often more expensive than their online counterparts.