5 Reasons Why Millennials Should Buy Life Insurance Right Now
It’s no surprise that studies show young adults are not into insurance. There are too many other financial challenges to worry about, such as paying off crushing student loan debt and saving for future goals. Actually, other studies show that younger adults would rather spend their money on such things as travel premium TV streaming services than use it to buy life insurance. Most are quick to spend $120 a year to insure an $800 cell phone, but, very few would consider spending a few dollars more each year to insure their lives.
Why should you concern yourself with life insurance? You're still young and relatively healthy. What do you have to protect? The fact is the decision not to buy life insurance when you are young and healthy can be a very expensive mistake. Here are five reasons why:
It Will Never Be Cheaper
The amount of premiums you pay for life insurance is based on your age and your health. The younger and healthier you are, the less risk you pose to life insurers, so your premiums are ultra-low. With permanent or level term policies you can lock in a low premium for most of your adult life. If you wait until your thirties or forties to buy life insurance, your premiums will jump dramatically. Worse yet, wait until you develop a health condition and it can be prohibitively expensive. If you plan on starting a family or buying a home, you will need life insurance. Now is the time to buy it, when it is cheap.
There Is Debt After Death
If you’re loaded down with debt, whether it’s a student loan, credit cards, or an auto loan, it doesn’t just go away in the event something should happen to you. For instance, if your parents took out a PLUS loan or cosigned a private student loan, they will be stuck with the balance. Although any exempt assets, such as a 401(k) plan or IRA cannot be touched by creditors, they can come after any other assets you might want to pass along. Creditors can and will go after family members to try to collect on a deceased’s debts. The bottom line is you should take responsibility for your own debt to relieve your loved ones of any hassles.
Dying Is Not Cheap
Everything else aside, funerals do cost money. Even if your wish is to skip the funeral and have your family and friends celebrate your life, it costs money to throw a party. There can be other final expenses that have to be covered as well. At the very least, you should have $15,000 to $20,000 in final expense life insurance coverage.
Your Company’s Life Insurance Benefit may be Fleeting
If you aren’t considering buying any life insurance because you have coverage at work, it is most likely going to be temporary coverage. If you are moving up the career ladder or are on the lookout for better opportunities, you will be changing jobs and companies at some point. Your next employer may not offer a life insurance benefit. Going back to reason number one, if you wait to buy your own individual policy it will be more expensive; that is if you are still able to qualify for a policy based on your health.
Your Company’s Life Insurance Benefit is Expensive
If you are fortunate enough to be offered employer-sponsored life insurance at no cost, you should definitely take it. However, if you are required to pay for it or pay the cost of coverage over a base amount, you need to shop and compare separate coverage because it is most likely going to be less expensive. Premiums for group life insurance plans can be much more expensive after age 35.
Bottom Line
If you are in your twenties or early thirties, it’s understandable why life insurance may be the last thing on your mind. But, when you consider the inevitable costs of postponing its purchase, it makes perfect financial sense to make it a part of your current financial plan. Literally, for the cost of one restaurant lunch a month, you can have the coverage you need right now.
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