6 Reasons Millennials Should Buy Life Insurance

Reason 1: Life Phasing Polices

Even as millennials focus on seizing new opportunities for education and careers, there seems to be little interest in life insurance. Most see life insurance as a method of paying debt in the event of a life tragedy or family misfortune. But it’s really about managing change accompanied by financial responsibilities.

Reason 2: Employer's Insurance

Millennial or not, it’s important to take the time to read your employee benefits. Take a close look at the features offered in the life insurance policy, and ask questions if you’re unsure about anything. Most employers will not offer a standard plan with an option for additional coverage, but the majority of companies have limited coverage.

In the event an injury prevents you from working, an employer’s policy may not cover your financial needs. In this case, you may need to secure independent coverage. In addition, having independent coverage will provide you with uninterrupted protection should the employer go out of business, you change jobs, or you get laid off.

Reason 3: Cost and Benefits

Premiums are calculated by the applicant’s age. A good health status translates into less risk, which typically reduces the premium.

If you are suffering from a health disorder, it’s a good idea to talk with an agent and get specific information on the features you need or should consider in the future. If you are diagnosed down the road with a serious health condition, the policy remains active.

Reason 4: Know Your Needs

Determine how much coverage you need. Do research on the types of policies available along with an insurer. Be sure to look for the insurer’s rating, which is an industry rating that measures the insurer’s financial strength and ability to pay the policy claims.

Life is full of surprises for young adults, some of which can cause serious injuries. So it’s also important to ask about riders for long-term healthcare or disabilities. These policies can help cover financial expenses.

Reason 5: Take Care of Business

As you accumulate assets and begin to raise your family, it’s essential to secure a backup plan using the life insurance features for paying day-to-day bills for childcare and family expenses. It’s an affordable method of providing for your family when you can’t.

• Choose between the two major types of life insurance: term or whole life.
• Term insurance pays a death benefit (sole provision) as long as the policy is in force whereas term policies can range up to 30 years.
• Whole life pays a death benefit and offers three plans: traditional whole life, universal life, and variable universal life.

Reason 6: Plan, Plan, and More Planning

Most of us know about life insurance payouts for injuries, death, and beneficiaries. Whole life policies also have a savings program—earning interest and building equity. Provisions vary from company to company. It’s worth the time to learn about this component. Portions of the policy earnings are tax-free, accumulating a cash value over time.

With a sufficient cash value, you can borrow against it or use it to pay the insurance premium during early retirement, keeping the policy intact. This is a valuable financial resource for young adults.