Millennials face financial complications that are very different from what their parents and grandparents faced. These complications often push purchasing life insurance to the back burner. But life insurance is the foundation of any financial portfolio. In this article, we will go over several reasons why millennials need life insurance.
There are several different reasons why millennials need life insurance. The first is that younger people lack equity. You have not had time to put away large retirement savings or grow home equity. Until you have a chance to stabilize your finances, life insurance can help fill in the gaps. This is especially important if you have someone depending on your income. Second, as your family and finances grow so do the issues that will arise if you pass. As you marry, have children, and acquire debt the need for life insurance grows. Life insurance will help you pay off debt and cover the gaps in expenses caused by the loss of your income.
Third, most young couples rely on dual incomes to survive. Because of this, the death of one partner will greatly affect the other. Life insurance can help to soften this blow. Lastly, the younger you are when you purchase your policy the better. This is the case because health and youth will help you to get the lowest premium possible.
Deciding What You Need
When you decide that you do need life insurance there are additional factors to consider. These include:
How Much Coverage You Need:
When deciding on how much of a death benefit you need you will want to think long term. Will you have a mortgage you need to cover? Do you plan on having children who will need daycare and will later attend college? Do you have other debts that need to be paid off? How much do you plan on your income being in the future? All these questions will help you to determine how much coverage you need.
What Type of Policy You Want:
There are two main types of life insurance policies. These are term and permanent. The average consumer should beware of permanent life insurance policies due to their high expense. A millennial consumer is better off purchasing a cheaper term policy and investing the difference. You will also need to investigate riders and see if there are any you want to add on.
Purchasing Your Policy
When you decide to purchase an insurance policy it is important to shop around. Meet with an independent insurance agent who can help you shop several insurance companies at the same time. This will help you to get the best price possible.
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