Because of the COVID-19 pandemic, more Americans than ever have become conscious of the need for life insurance. Life insurance applications have gone up across the board, but millennials are one of the fastest-growing groups applying for life insurance policies.
Consumer research revealed that nearly 1 in 3 millennial Americans said they feel an increased need for life insurance due to the coronavirus. Despite student loan debt and their relatively recent entry into the job market, many millennials are closing their life insurance gaps to prepare for the future.
If you're a millennial, this may be the first time that you're engaging in any life application activity. Read on to find out why you should apply for insurance, and how your life insurance benefit could secure your family's future.
Why Millennials Should Buy Life Insurance Policies
Because they’re young and relatively healthy, millennials are in a good position to apply for life insurance. There are two main things to consider when getting coverage: repaying your debts in the event of your death and securing the financial future of your family. You'll need to prepare for increased commitments as you age and your life changes, such as college tuition for children or a home mortgage.
Here are some strong reasons why you should apply for whole or term life insurance while you're still young:
You Can Skip The Medical Exam
Applying for life insurance coverage will typically require you to answer a questionnaire about your family's medical history. You'll also have to undergo a medical exam and explain any existing medications. If you have complicated medical conditions, you may need to get an attending physician statement. These processes can take up a lot of your time and feel uncomfortably intrusive.
With a process known as "accelerated underwriting", your insurance company will allow you to send online life insurance applications with an e-signature. Instead of asking you to take blood and urine tests, your insurers will rely on data about you from risk assessment company MIB Group, your electronic health records, and your prescription drug use.
Young and healthy coverage buyers (like millennials) are most likely to be approved for accelerated underwriting, so avail of this easier application process while you can!
The Earlier You Buy Life Insurance, The More Affordable It Is
Life insurance premiums are computed by underwriters based on several factors, such as age, gender, and risk-taking activities. Simply put, the longer you're projected to live, the less expensive the cost of coverage will be. Because millennials are still young and projected by life insurance companies to have a lower mortality rate, they can get a life policy at more affordable rates.
The best part of buying life insurance policies this early is that, once your policy has been approved and the rates are set, those are your premium rates until your policy expires. Even if you develop health issues later on, your life insurance company cannot charge you more than the agreed premium. Lock that rate in while it's still relatively low, and you'll save a significant amount while preparing for your family's future.
Life Insurance Covers Your End-Of-Life Expenses
It may seem early for millennials to get a life insurance benefits package, but it's always wise to be prepared for the unexpected. Even a healthy 24-year-old person can suddenly get in an accident or contract a serious illness, causing them to rack up massive bills for medical treatment.
If another person co-signs your hospital bills to help you pay for treatment, this makes you and them liable for the cost. It can leave them in serious debt if you suddenly pass away with your bills unpaid.
Apart from the cost of treatment, there are also funeral costs, which other people may also have to shoulder if you don't have the policy to pay for it. Save them the trouble of fretting over these large expenses by purchasing a life insurance policy, which can be used to offset these end-of-life costs.
Life Insurance Will Protect Your Loved Ones From Debts
One of the biggest reasons why millennials need life insurance is to protect their family members from their debts, especially if those debts were co-signed by their parents or other relatives. Common sources of co-signed millennial debt include student loans and credit card debt. If you had a co-signer share the liability for that loan, that makes them liable to repay it if you can't.
While government student loans are discharged if the student passes away, this is not the case for private loans. By getting a life insurance policy, the death benefit can be used to pay off any remaining balance for your credit card or student loans, so no one will have to worry about this financial burden.
Life Insurance Can Maintain Your House
If you're a millennial, you may also be considering the high cost of mortgaging a home. Mortgage debt can be a heavy burden for the people you love if you suddenly die and leave behind unpaid installments. Instead of purchasing mortgage protection insurance, which repays your loan if you die, you could get a term life policy.
You can get coverage for your end-of-life expenses and secure your home at the same time by taking out a term life insurance policy. It's recommended that you get a policy with coverage equal to the value and length of time of your mortgage. If you pass away during the coverage period, you can ensure that your spouse and children have enough to pay off the mortgage and keep your house.
Life Insurance Can Help Your Family Live Comfortably
If you have several people dependent on your income for support, your sudden death could leave them financially unstable. By getting an insurance policy, your family can use the death benefit to support the household and maintain their standard of living.
You can also consider getting a cash value life insurance policy, where a part of your premiums will be invested and will earn interest. With this form of life insurance, you can withdraw the cash value or borrow against the policy, allowing you to access money at lower interest rates than banks or other lending institutions. This will provide a useful source of cash if there's an emergency.
Millennials need life insurance to prepare for any future expenses. If you're a millennial, apply while your premiums are low to enjoy financial security and plan ahead.
Find out how much coverage you should get with the advice of an insurance expert. Talk to us if you have any questions about life insurance basics and how to get insured within your budget. Wesley Insurance, LLC can get you started on securing your family's future and help you plan the right policy for your needs.