Top 10 Reasons Why Millennials Need Life Insurance

Millennials often overlook insurance as a necessity and may even believe it's best left for the generations before them. But life insurance isn't limited to Baby Boomers or Generation Xers. Millennials need life insurance, too. Research shows that while 84 percent of Americans believe life insurance is necessary for most people, over 40 percent still lack life insurance, including millennials. Moreover, a 78-percent shortfall of life insurance coverage exists for millennials who even have a life insurance policy. Still, life insurance is worthwhile, even if you're a young millennial. Here are ten reasons it's crucial to get life insurance.

1. Cheaper Rates

Age can impact the premium you pay for your life insurance. Life insurance rates can increase between five and 12 percent each year based on your age. That means the younger you are, the cheaper you can expect your life insurance rates to be.

You can also expect life insurance policy rates to be cheaper for healthier individuals. Thus, you'll likely get more affordable insurance policy quotes as a young person now compared to when you are older and less healthy. That's because those who are young are usually less of a risk of dying due to health-related illnesses than older individuals. So, life insurance policy rates for millennials are often a fraction of older life insurance policyholders' costs.

2. Self-Employment

Whether you've taken your side hustle full time or you're running a startup, if you're a self-employed millennial, then it's critical to have a life insurance policy. Even if you don't have a family, your death can impact your business and even risk layoffs or bankruptcy. With life insurance, you can protect your business from the instability, liabilities, or financial loss your death may cause.

3. Costly Funerals

Research from the National Funerals Director Association (NFDA)indicates that the median cost for funerals in the United States with a burial, viewing, and vault was $8,755 in 2017. But these prices can get even more expensive when you include extra features and events, such as a repast or special woods for caskets. For instance, average prices for caskets alone can cost between $2,000 and $10,000 based on the casket's material. But the good news is that life insurance can help cover these expenses, so your family members aren't left to foot the bill.

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4. Dependents

If you have dependents, then it's essential to consider getting a life insurance policy. A life insurance policy can help cover your family's living expenses should you pass away. You can also use life insurance policies to help protect your child's college education.

5. Supplement to Employer's Insurance

Sometimes the life insurance policy you get from your employer isn't enough. Your employer may not offer the best policy to cover your financial needs. So, it's worth having another life insurance policy to help supplement an employer-provided one.

6. Debt Coverage

While your student loans and other similar debts may cancel once you pass away, some debts may live on past your death. For instance, if you pass away and have a loan with a co-signer, the living party will be responsible for paying your portion of the unpaid debt as well as any debt they may owe. However, you can get life insurance to help take care of these costs.

7. More Options and Transferability

Just because your employer is offering you a life insurance policy doesn't mean it's the best one to meet your needs. Also, your employer's life insurance may not be transferable should you leave your job. It's essential to assess your financial goals and needs to determine the right life insurance policy for you. That's why it's vital to look at various options for life insurance and compare your options to find the right one.

8. Access to Future Funding for Your Business

If you pass away, your business--and employees--may still live on, so it's critical to have a life insurance policy to keep your business running. As your business leader, you may have more access to get funding to support your goals. But that access may go away should you die. Instead, consider getting a life insurance policy that helps you set aside money for your business to use as collateral should the company need funding from traditional lenders in the future.

9. Estate Tax Coverage

If you pass away and have a large nest egg, your loved ones who inherit your life insurance death benefits will likely have to pay an estate tax. For instance, if your spouse dies before you do and your children become the new beneficiaries of your life insurance policy, it may be subject to an estate tax. The amount of your estate tax will make a difference, the larger your estate. So, it's crucial to have a good life insurance policy to cover these expenses.

10. Lost Income

The reason you work is to help obtain income not only for yourself but also for your family. But if you pass away, your family can experience a significant financial loss. This also goes both ways if you depend on your spouse's income. That's why it's critical to take out a life insurance policy to help cover the loss of your income in the event you die unexpectedly.

Final Thoughts 

Getting life insurance is as essential for millennials as it is for anyone else. So, it's critical to take action and find the right policy that meets your needs. Evaluate your financial goals, consider your expenses, and how it impacts the ones you--or your business--take care of, and use this information to compare life insurance policies. By taking these steps, you can find a life insurance policy that's right for you.