Is it time for more millennials to ‘like’ life insurance?
If you graduated from college anytime over the last five to ten years, chances are good that once the excitement of earning your diploma wore off, things immediately turned chaotic. After all, there were decisions to make about everything from whether to attend graduate school and where to live to what type of job to take and, of course, how to pay off student loans.
Fast forward to the present and things are (hopefully) a lot less hectic. Indeed, if you’re earning a good salary in a career you enjoy, in a location of your choosing, please take a moment to congratulate yourself on a job well done!
As nice as it is to finally be financially comfortable, experts indicate that you, the millennial, also can’t afford to become complacent. This is particularly true, they argue, in relation to life insurance.
Do twenty-somethings really need to purchase life insurance?
While it’s understandable how a millennial might dismiss life insurance as an unnecessary expense, experts indicate that they need to ask themselves a very important question before deciding: Is anyone dependent on my income?
Though the temptation may be to automatically answer “no” if there are no children in the picture, experts urge millennials to dig a bit deeper. For example, did you take out a mortgage or sign a lease with a significant other? Did your parents co-sign one of your sizeable private student loans? If the answer to either is “yes,” then life insurance might need to be considered.
What about the life insurance offered through work?
Those who don’t earn a living in the gig economy are sometimes provided with some level of life insurance through their employer. While this is a nice benefit, the reality is that it’s often not in an amount sufficient to cover the aforementioned expenses.
Indeed, while it’s probably not pleasant to think about, a sizeable portion of these already limited funds would likely be consumed by funeral expenses straight away.
You convinced me, now what type of life insurance is best?
There is unfortunately no definitive answer to this question, as the individual needs and circumstances of every millennial — just like any Gen Xer or Baby Boomer — are different when it comes to life insurance.
Experts do indicate, however, that most young people would be sufficiently covered by a term-life insurance policy worth anywhere from $500,000 to $1 million over the next 20 to 30 years, which can be found through careful shopping for anywhere from $50 – $70 per month (depending on underlying factors).
Source: Barron’s Next, “Do millennials need life insurance,” Carla Fried, March 21, 2017