What’s the similarity between home ownership and life insurance?
The answer…They both play integral roles in the American Dream. After all, having either one (or better yet, both) indicates a better quality of life.
That’s why those stories about millennials giving up home ownership are all but a myth. In fact, it’s thanks to them that the home ownership rating went up from 63.7% to 64.2% in 2017.
But what about life insurance for young adults? Again, contrary to popular belief, as many as 70% of millennials own some form of it!
All these show that 22 to 37 year old adults still place importance on life insurance. That this product is still affordable. With the right techniques, that is.
Don’t worry. We’ll let you in on the secrets to getting cheap life insurance, so keep reading!
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Why Young Adults and even Millennials Need Life Insurance
We get it. You’re young and you have a bright future. The last thing that you may want to think of now is getting old and thinking of what old age can bring.
We’re not here to scare you, but we also want you to think of the other end of tomorrow’s spectrum. Here are a few stats to put things in perspective:
- A whopping 30.8 million emergency department visits result from accidental injuries
- 2.35 million of these injuries (including disabilities) result from road-related accidents
- The average cost of hospitalization runs up to $10,000
What we’re saying here is that accidents can happen to anyone. They can take place anytime and can put anyone in serious safety and financial risk. Regardless of how healthy and fit a person is.
This is enough reason life insurance for millennials is as important as health insurance. You don’t want to find yourself in an accident, but it’s best to prepare in case it does happen.
Life insurance isn’t only about preventing financial problems from effecting your loved ones in the event of your passing. Yes, they can use the policy’s payout as an income replacement. More than that, they can use it to pay off debts, as emergency funds, and allow your children to continue school.
There’s even a type of life insurance with cash value features! Known as the “indexed universal life insurance,” this policy builds money that you can borrow or withdraw against. That means you can enjoy your hard-earned (and saved) money while you’re still around to enjoy it.
Term Vs. Permanent Life Insurance
After reading about all the benefits of life insurance for young adults, you now want to know your options. There’s a lot to choose from, but the three primary ones include the following:
Term Life Insurance – Most affordable
With a term life insurance policy, you receive coverage for an agreed-upon length of time known as contract lengths. You can choose anywhere from a 1 year up to 30 year contract length. During the length of the contract, your premium is locked in and will remain the same price throughout the entire duration of the contract.
Universal Life Insurance – Most affordable permanent option
Universal life insurance is available in several different variations. These variations include current assumption, guaranteed and indexed. What each of them have in common is that they are an affordable option for permanent life insurance coverage. Each also have the potential to earn cash value growth to be used if needed.
Whole Life Insurance – Most expensive but has guaranteed cash values
Whole life insurance is one of the most well know forms of permanent life insurance coverage. With this coverage you can expect a permanent premium, guaranteed death benefit as well as guaranteed cash growth and potential dividends.
How Much Life Insurance do you Need?
Life insurance needs will vary from person to person. It is truly impossible to recommend an appropriate amount of life insurance without knowing the individual’s personal background and life insurance goals. However, there are some simple methods that you can follow to help give you a starting point.
You need to consider your worth in terms of income and assets. But, you also need to ensure your income (less your usual expenses) can cover your coverage’s monthly premiums. Having kids and what you want for their future is also a critical consideration.
A good way to determine how much insurance to get is to calculate how much your dependents would need if they were to lose you today. It’s a thought that many push to the back of their minds, but shouldn’t. After all, it’s one of the reasons many families end up with financial burdens when their breadwinner suddenly passes away.
In any case, ask yourself how much money your dependents need to remain financially afloat without your income. From this, subtract how much your surviving members would get from your assets and savings accounts. For the purpose of having a good starting point, multiply that number by at least 10-12. Again, this is just a good starting point. Other potential factors should be taken into consideration such as college expenses, funeral expenses, medical debts etc.
Life Pro Tip: Comparison is Key to Securing a Great Deal on Insurance
Like with any product or service, you should compare life insurance rates as well as different coverage options from various companies. There are so many options available and the internet is a great starting point for doing your own research.
For example, our website has a quoter that can provide you with instant life insurance rates. Also, since we are an independent life insurance agency, we work with over two dozen of the top rated life insurance companies in the U.S.
By having as many options as we do, we are able to help our clients get the most affordable life insurance coverage based on their life insurance needs.
Applying for Life Insurance is Millennial Friendly
Applying for life insurance coverage has never been easier. Life insurance has had significant changes over the past decade. This is not only in types of coverage you can now get, or newer features and benefits, but also in the way you can apply.
Several life insurance companies offer an electronic application process eliminating the paper application. The there are also many life insurance companies that offer what is called accelerated underwriting and it’s designed to be fast. It’s so fast that you can be approved for a new life insurance policy within the same day of applying.
This is all done with newer advance underwriting methods. Best of all, you can even be qualified without having to do a medical exam.
Life insurance has come a long way. The times of having to go and meet with an agent for a quote or to complete an application are not necessary. Of course these options are still available if desired.
Final Tip: The Younger You Are, the Cheaper Life Insurance Is
In general, insurers base their rates on the likelihood of paying out an insurance claim. As such, many of them consider young adults in generally good health and to have a lower risk than their older peers. This “thinking” then gives millennials the chance to get much lower rates.
Remember, everyone ages every day. So, consider purchasing life insurance for young adults as soon as you can. This way, you can better prepare for anything that tomorrow (and all the days after that) may bring.
One last note, if you have any question or need assistance on getting life insurance as a young adult or a millennial, please be sure to reach out to us by phone or email. Top Quote Life Insurance is an independent life insurance agency that can offer you both rates as well as coverage options from multiple life insurance providers.