The main reason a person chooses to purchase a life insurance policy is to protect their family’s financial future, in case something unthinkable happens. This is particularly important for anyone whose paycheck is helping to support another person.
If you are the sole breadwinner in your family, you might think a life insurance policy is the obvious choice. But what if you do not have a wife and kids that are dependent on your paycheck? Do you still need life insurance? While we can’t answer that definitively, there are a few common scenarios in which millennials should consider investing in a life insurance policy.
#1: LIFE INSURANCE IS CHEAPER WHEN YOU ARE YOUNG AND HEALTHY.
While the average millennial is not too worried about an imminent death, most life insurance policies have a fixed cost. You will pay the same cost monthly for the entire length of the life insurance policy – usually 20 to 30 years for term life insurance. Signing up for a life insurance policy sooner, rather than later, can help to lock in a low price and save you money in the long run.
#2: YOU DO NOT WANT TO BURDEN YOUR LOVED ONES WITH HEFTY FUNERAL COSTS.
While it is morbid to think about, the whole point of life insurance is to help protect your loved ones’ financial future in the event of your untimely demise. The average funeral racks up a bill of $8,000 or more. Even a small life insurance policy can help to cover funeral costs and ease the financial burden that will be placed on your survivors.
#3: IT IS POSSIBLE FOR YOUR DEBT TO OUTLIVE YOU.
If you are like most millennials, you probably still have some outstanding student loan debt. Maybe it is from graduate school, or perhaps you chose to attend a private school for undergrad and are still paying for that privilege. Regardless of how it was acquired, your student debt has continued to follow you since graduation.
One of the many benefits of federal student loans is that they are usually dis-chargeable upon death. This means that your debt dies with you. But what if you have private student loans? Many private student loans came with a co-signer – usually a parent or other close relative. If this is the case, the loans are the legal responsibility of both parties and are not dis-chargeable upon the death of one party. This means that your co-signer may still be paying for your degree years after your funeral.
A term life insurance policy is one simple way to avoid leaving your generous co-signer stuck with a huge bill. If you have any large debts that are shared with a co-signer, including auto loans or student loans, consider taking out a life insurance policy that is greater than all of your remaining debts. Your loved ones will have enough to worry about without taking on your outstanding debts in the event that you pass prematurely.
If you care about life insurance for one of these three reasons, consider purchasing a term life insurance policy sooner rather than later.
Opinions expressed in this article are solely the author’s opinion, not intended to provide the reader with legal or any other professional advice. Should you need advice or opinion, consult with a qualified professional to address your specific needs.