Statistically, if you’re reading this and you’re a millennial, you probably don’t have a term life insurance policy. Or, if you do, you are likely underinsured.
Despite the simple, affordable options available, some studies estimate that as few as 34% of millennials have adequate life insurance coverage. It isn’t because you’re clueless about finances—in fact, that’s the least likely reason.
As a millennial, you’re in a different league than every previous generation when it comes to money. Not in the sense of having less of it (though there’s that, too) but in terms of investing and using it wisely.
In fact, millennials are managing their finances better than GenXers and Baby Boomers were at the same age—at least in terms of their grasp of the uncertainties of the financial markets and their willingness to sacrifice lifestyle perks to secure a better financial future. Millennials have lived through economic uncertainty as teens and have learned from the mistakes of their parents’ generation when it comes to the responsible use of credit, buying a home before they’re financially ready, and looking for value rather than brand names when making major purchases.
Though they may be ahead of other generations in their money habits, term life insurance coverage is one of the few adulting areas that millennials fall behind in.
Most People Just Don’t Have the Right Information About Life Insurance
Though they may be ahead of other generations in their money habits, term life insurance coverage is one of the few adulting areas that millennials fall behind in. And that’s because the process of selecting the right policy is often far more of a challenge than it needs to be.
One of the main reasons that you’re probably uninsured is that hardly anyone in the insurance industry is actually talking to you—at least not about the things that you really need to know.
» Calculate: Life insurance needs calculator
A lot of insurance companies, at least up until now, seem to have overlooked the fact that you’re a grown-up with a job, your own home, and bills to pay. In fact, more than 50% of millennials have never been targeted by an ad for life insurance or interacted with a life insurance representative.
You probably don’t mind skipping the ads, but we also know that you like clean facts and figures without the blah-blah sales speak. But that kind of information about term life insurance policies can be ridiculously hard to find online. About 83% of all American consumers—including millennials—say that life insurance companies have done a lackluster job answering the question what is term life insurance? and with explaining how the life insurance process works. Close to 70% also state that researching life insurance policies on their own just takes too much time.
So, let’s clear this up right now.
3 Big Myths About Term Life Insurance
1. It’s Crazy Complicated
Yes and no.
Term life insurance provides security over a set time period. If you go through major life changes—like getting married, launching a business, or taking in an elderly family member who will rely on you—you can change your coverage by converting to a permanent policy or applying for an additional term policy. Term life insurance coverage will provide the cash necessary to make sure that things like your pets get taken care of and your stuff doesn’t have to be sold to cover expenses after you’re gone.
2. You Can’t Afford It
Life insurance can cover a significant chunk of your income, but it won’t eat your bank account.
In fact, most millennials vastly overestimate how much term life insurance premiums cost. Hint: you won’t need a side hustle to make payments. Many six-figure policies have premiums as low as $20 a month. If you work with a life insurance broker, like Quotacy, you’ll be able to compare quotes to choose a term life insurance policy that matches your budget.
» Compare: Term life insurance quotes
3. It’s for People Who Grew Up Using Rotary Phones
Spin classes and kombucha tea may make you feel unbreakable, but neither you nor your FitBit can predict a sudden change of health.
Statistically, Americans are actually dying more quickly—and younger—than previous generations. If that’s not scary enough, many of your financial obligations—like private student loans—will live on, Walking Dead style, long after you’re no longer with us. That means lenders will look to your spouse, loan co-signers, and even your parents if your debts are more than your assets. Millennials who buy term life insurance earlier can take care of that, allowing you to rest in peace well before you actually rest in peace.
Before deciding to look for a policy—or assuming that you can afford to wait— take a hard look at your assets and liabilities. You can even use our handy tool to estimate your insurance needs if you don’t feel like doing the mental math.
|What you have now (A)||Amount|
|Bank accounts||+ $|
|Taxable investments and savings, excluding your home||+ $|
|Real estate you own excluding your primary home||+ $|
|Total of what you have now (A)||$______|
|Debt and expenses due at your death (B)||Amount|
|Funeral and burial expenses||+ $|
|Final income taxes||+ $|
|Estate probate costs||+ $|
|Mortgages and loans||+ $|
|Credit card debt||+ $|
|Total debts and expenses due at your death (B)||$______|
|(A) – (B)||$______|
That potentially scary number above is what you’ll leave your surviving family if you don’t get term life insurance to cover them.
At Quotacy, we want to help you make an independent term life insurance choice armed with the right info with as little hassle as possible. Try out our free tool that will allow you to gauge your insurance needs and get an online life insurance quote in minutes.
» Learn more: Why You Shouldn’t Wait to Buy Life Insurance
About the writer
Quotacy is the country’s leading broker for buying life insurance online. We are obsessed with making it easy for everyone who has loved ones who depend upon them to have life insurance.