The saying that nothing is certain but death and taxes remains true, no matter how the tax laws change. Surprisingly, while we all know that this is true, a recent study by an insurance company revealed that 85% of millennials don’t understand the purpose of life insurance. Now that they are moving into their “we’re not kids anymore” years, it’s time for this generation to get their risk management in order.
Forbes’ article, “Why Older Millennials Need To Start Taking Life Insurance Seriously,” notes that, although most millennials may not have given life insurance much thought before, it's now time to begin taking life insurance and other estate planning more seriously. To help with this, more companies are starting to take millennials seriously when it comes to financial matters. The result? It's getting easier than ever before to get life insurance.
Life insurance is used to protect your family financially, in case of your death. That is important for millennials who are starting families that depend on them financially.
According to Pew Research, 60% of families depend on dual incomes, and just 31% of families rely on a single income. A total of 91% of families in the U.S. require the income of at least one spouse to survive. However, what happens if one (or both) die? That's where life insurance comes into play.
Because millennials are still relatively young, getting life insurance is very cost effective. In addition, for the vast majority of millennials, a simple term life insurance policy might do the job. Term life policies are very inexpensive and can be a financial relief, if they’re ever actually needed.
It's possible to get a $1,000,000 term life insurance policy for about $40 per month, depending on your age and health. That is quite a bit of insurance for little expense. Of course, every family is different and has different needs, so consulting a financial advisor and researching multiple life insurance companies is recommended.
Life insurance companies are addressing how this generation wants to conduct their business and have invested in the technology. You can now purchase life insurance through an app or an online solution. This generation wants to make the most use of technology and likes to be able to purchase everything, including life insurance, through a digital platform. Speed and ease of use is their priority.
Life insurance, is just once piece of the puzzle when it comes to risk management techniques for life, and another immensely important piece is having an estate plan. Sitting down with an experienced estate planning attorney will not only determine what happens to your assets when you die, but also sets up parameters for what happens if you are incapacitated, and ensures you are able to protect your family and their future.
Reference: Forbes (January 26, 2019) “Why Older Millennials Need To Start Taking Life Insurance Seriously”