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For many millennials, life insurance is the last thing on their minds. Denigrating hot takes will say that millennials are too busy thinking about Snapchat and participation trophies, but they’re actually preoccupied with student loan debt, kickstarting their careers, trying to afford homes, and starting families.
But life insurance is a crucial component for any millennial looking to fulfill their financial goals before they’re middle-aged. The best time to buy life insurance is when you’re young and healthy because you’ll get the best rates, and a number of top carriers – Banner, Lincoln, Pacific Life, Protective, AIG, SBLI, and Principal – offer great options for millennials looking to create an affordable financial safety net.
So why should you look at your life insurance options when you’re in your 20s or 30s? First of all, you get it out of the way and it’s one less thing you’ll procrastinate on over the next two or three decades.
But besides the feeling of having accomplished something, there are other reasons you should buy life insurance early:
It doesn’t get any cheaper. Unless you’re particularly unhealthy and make some drastic changes to your health in the future, life insurance will never be cheaper for you than it is at this moment. Life insurance premiums increase by an average of 8-10% every year you put off buying it. And that’s just from getting older; who’s to say what your future holds, health-wise?
Not having it is a gamble. Some people don’t want life insurance because there’s a chance it won’t pay out, and they see that as throwing away money. But the truth is that not being insured is the bigger gamble. By not having life insurance, you’re making a big, statistically-questionable bet that nothing will happen to you. And when you’re younger, you have that many more uncertain years ahead of you. Buying life insurance is a logical choice.
You need it more than you probably realize. "I don’t have a mortgage or kids yet. I don’t need life insurance!" That’s what a lot of millennials think. But covering your debts is one of the biggest reasons to buy term life insurance—and you probably have more debts than you realize. Student loan debt? At $1.4 trillion, there’s a chance you have it. What about a car loan? And more important than your debt is who shares it. You probably have a cosigner on those student loans, for example. There are some legitimate instances where you don’t have immediate need for life insurance, but don’t dismiss it out of hand until you assess your debts.
You can start on your other goals. Taking on a big expense like a first house can be risky, which makes it scary. Even scarier is that you can leave loved ones on the hook if you die. Add that mortgage to your student loan and other debts, and the idea of it all becoming someone else’s problem can seem overwhelming. It’s a Russian nesting doll of financial worry that can keep you from even starting on your goals. But life insurance gives you peace of mind because it’s instantly complete– once you have it, your family gets the death benefit if you die. Mortgage, covered. Student loans, covered. That means you can get started on everything else you want to do with your life without worrying about how your family will carry on.
We pulled sample quotes for a millennial male at three ages: 25, 30 and 35. Rates are for a healthy male in California, for a 20-year, $500,000 policy.
|Carrier||Age 25||Age 30||Age 35|
|Mutual of Omaha||$28.17||$28.17||$29.89|
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An affordable premium is an important part of any life insurance plan, but there are other factors you should consider when choosing the best carrier for you for the next 20 years.
Are they a good match for your health? Just like some carriers offer better premiums rates for young people, some carriers offer more competitive rates for applicants with complex health histories, like diabetes or cancer. If you don’t get an affordable rate with one carrier, see if others are more accommodating.
What types of policies and riders do they offer? Did you know you can get your premiums returned to you at the end of your policy’s term with a return of premium policy? Or that you can access the death benefit early with an accelerated death benefit? If you want special features on your policy, make sure a carrier offers it.
What can you do electronically? Some carriers allow you to make changes to your policy only by mail, while others let you call or submit changes online. If your preference is to do things digitally, go with a carrier who can accommodate you.
What is the typical timeline? The life insurance application process can take up to eight weeks, but some carriers are faster than others, especially those who offer accelerated underwriting.
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