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Why Do Young People Need Life Insurance?

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Discover the benefits of searching for a term life insurance quote while you’re young

If you are a young millennial, life insurance is likely low on your priority list. That’s why we’re here to show you why you should actually begin searching for term life insurance quotes while you’re young!

Life insurance isn’t just for when you have a child or are taking care of an ailing parent—life insurance protects your loved ones no matter what happens. Not only that, but the best time to get life insurance is when you are young. There are a number of reasons as to why you should get life insurance while you’re young—including your health status and the total cost. But, before we get ahead of ourselves, we should take a minute to explore the benefits of life insurance as well as what is included in your coverage. Later on, we’ll be discussing how you can secure affordable life insurance as a young millennial. Let’s get started!

What are the Benefits of Getting Life Insurance Coverage?

A lot of young people don’t feel like they need life insurance because they aren’t sure what it covers.

Life insurance prevents your loved ones from having to pay off your debts.

Young people have a lot going on. From paying off outstanding college debt to getting a career started, your 20s and early 30s are a very busy time in your life. Because young people are so busy, it can be easy to let important things fall by the wayside—including securing life insurance.

Before we can get into finding the best term life insurance quote for your needs, we first have to talk about the different types of life insurance available. First, we have whole life insurance or permanent life insurance. These terms are interchangeable as they both mean that you are guaranteed life insurance for your whole life—as long as you pay your monthly premiums. These insurance plans also offer an accumulating cash value that you can use during your lifetime. The cash value accumulated by your whole life insurance plan can be used for things like medical bills or other essential health-related expenses as you age. The downside for whole life insurance plans is the cost. These plans are costly—no matter your age, since a whole life insurance plan is a greater risk for the insurance company than a term life insurance plan.

Term life insurance is the second type of insurance we’ll be discussing. As opposed to a whole life insurance policy, a term life insurance policy only lasts for a set amount of time. These “terms” often last anywhere from 20 to 40 years. Term life insurance is pretty self-explanatory—your coverage only lasts as long as the duration of your term. The reason why most young people search for term life insurance quotes as opposed to whole life insurance is due to the cost difference. Term life insurance is far less expensive than whole life insurance because there is less risk involved for the insurance company. Lots of young people choose this option because the low-cost plan can cover outstanding debts and prevent loved ones from experiencing financial hardship.

Why is it Best to Secure a Term Life Insurance Quote While You’re Young?

If you are looking for coverage on a budget, now is the right time to start exploring different term life insurance quotes

Getting insured is far easier when you’re young and healthy.

If you are a millennial looking for life insurance, now is the time to use your youth to your advantage. If you are in your late 20s or early 30s, you can secure a 30 year $250,000 term life insurance policy for anywhere from $20 to $40 per month. If you would try to purchase the same 30 year term life insurance policy in your late 30s or early 40s, your monthly premium could double. This is of course due to the fact that the older you are, the higher risk the insurance company must take to insure you.

It should also be noted that your health and habits factor greatly into the cost of your life insurance policy. If you maintain a healthy lifestyle, avoid high risk activities, and do not use tobacco products, you’ll be able to get the lowest possible quote. However, if you have health issues, participate in high risk activities, or use tobacco then you will pay a higher monthly premium.

Is Insurance Coverage Necessary?

We’re so glad you asked! We’re going over a few of the most common reasons people need life insurance

Ask the important questions before purchasing a life insurance plan.

One of the main reasons why young people don’t take advantage of their youth to get an affordable life insurance policy is because they feel like they don’t need coverage. In reality, more millennials need insurance coverage without realizing it. That’s why we’ve created a list of life situations that require life insurance. Let’s take a look:

  • You have outstanding debts

  • You have someone that relies on your income

  • You are getting married

  • You are planning to have a child

  • You are taking out a mortgage on a home

  • You are paying for care for aging parents

If you are in any of these situations, you require life insurance. For the purpose of outstanding debts, in the event of your untimely death, your debts will be transferred to your loved ones unless you have insurance. This includes student loans and credit card debts.

If you have another person that depends on your income, like a child, parent, or a spouse, you need to make sure that they are covered in case you aren’t around. For example, if you are paying off a mortgage on your first home you bought with your partner and the unthinkable happens, your partner will be stuck paying the full amount on a single income. To avoid this situation, you need to make sure that you have coverage for as long as it will take you to pay off your mortgage.

How Much Coverage Should a Young Person Purchase?

There are a lot of factors that will determine how much coverage you need for your term life insurance policy

Everyone’s financial history is different—which means life insurance is not one-size fits all.

Before you decide on an insurance plan as a young person, you will need to decide how much life insurance you want to purchase and the duration of your term. While there is no definitive way to calculate how much insurance you need, there are a few key points you should keep in mind. First, you want to make sure that your insurance can cover any outstanding debts. Next, you need to calculate how much you want—or how much you can afford—to cover your loved ones after your death. For example, if you are married you should plan to provide for your spouse for anywhere from 5-10 years after their death. In order to tabulate a rough estimate, multiply your yearly income by a number between 5 and 10, from there you have the amount of coverage you need to provide for your spouse.

You will also need to determine the duration of your term life insurance policy. Generally, policies last anywhere from 20 to 40 years. For a lot of people a 30-year life insurance plan is enough to cover paying off their first mortgage and raising children. But, not everyone is the same, so you should carefully consider how long you want your policy to last before making a purchase.

And there you have it! We hope we sufficiently elaborated on why young people need life insurance. Not only is it necessary to cover any outstanding financial responsibilities, it can also cover your for whatever may come in the future—including marriage and having children. If you are unsure about whether or not you should get insurance, you can always seek out additional financial advice from a counsellor to set you on the right track.

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