Life insurance. You’re young and healthy—you don’t need to worry about that right now, right?
By all accounts, the Millennial generation is postponing traditional milestones like getting married, buying a home, or starting a family. In addition, Millennials face higher rates of unemployment and typically lower incomes than those in other generations. As a result, many Millenials put off buying life insurance.
Others may fall victim to the “out of sight, out of mind” mentality. It isn’t uncommon for people to avoid thinking about their own mortality—and to overlook life insurance, as a result.
Despite these factors, life insurance remains a vital component of financial planning for any individual.Purchasing life insurance may be especially important for Millenials. Here are some reasons why:
Life Insurance Costs Less When You’re Young
The cost of any life insurance policy depends on a number of variables, including the presence of any negative risk factors. As people get older, they tend to be more prone to serious medical conditions such as cancer and diabetes. As a result, the cost of life insurance tends to increase with age. When you are young, you tend to be healthier, and your life insurance policy will typically cost less.
Buying Early Can Help Increase Cash Value
It’s important to start out with a sound financial strategy, and life insurance is a crucial part of that.
In addition to the protection it provides, life insurance can also help you to build cash value. When you buy permanent life insurance early, you have a longer time to put money into the insurance plan, and to allow your money to draw tax-free interest. If you buy a policy now, you may be able to lock in your premium so that it will never increase.
Life Insurance Protects Your Loved Ones When They Need It Most
None of us are immortal—that’s no secret. Still, the death of a young person is typically shocking and unexpected, and the consequences can be far-reaching. Most Millennials are just starting out on the career path, with limited—if any--savings. Many are burdened with student loans. Some have young, growing families. Financial stability is a luxury—one that becomes even more precious when an unexpected tragedy hits.
Life insurance can help to replace the income of a family’s breadwinner, to establish college funds for children, and to help offset medical bills and other costs. Life insurance can help to keep your family in your home. Life insurance can help to give your loved ones some peace of mind during a time of grief.
There are Living Benefits, Too
When discussing life insurance, the primary focus tends to be on the death benefit: money that is paid out to beneficiaries upon the death of the policyholder. While this benefit is valuable, there are other benefits to life insurance that are available while you are still alive. Living benefits allow you to access the cash benefit of your life insurance through policy loans. These loans can help you pay off your student loan, buy your first home, offset the costs of a wedding, or help you to manage unexpected costs. Down the line, you can even use some of your life insurance policy’s cash value to supplement your retirement income.
To learn more about life insurance and how it may benefit you,contact The Reis Group.