A recent survey conducted by insurance-comparison website Insuranks revealed that less than half of millennials have life insurance. Of the 1,000 respondents born between 1981 and 1996, only 47% reported having a life insurance policy.
Interestingly, the survey found that 48% of millennials without coverage expressed a desire to obtain it. The primary hurdle cited by 66% of these respondents was the perceived high cost of premiums. Additionally, nearly a third (29%) felt overwhelmed by the complexity involved in selecting a suitable policy.
A notable finding was that only 36% of respondents revealed they didn’t possess life insurance due to not having a family to support. However, among married millennials surveyed, half expressed concerns that the death of their spouse would lead to financial hardship within six months, with one in six indicating it would occur within a month.
As millennials navigate the life stage of planning or starting families, the importance of life insurance becomes apparent. Financial dependence on individuals, such as spouses or children, underscores the risk of leaving them without adequate support. A comprehensive life insurance policy can cover outstanding debts and provide essential replacement income.
Even for those without dependents, life insurance can prove invaluable for covering funeral and burial expenses. According to the survey, this is a leading motivation for millennials purchasing life insurance, considering the average cost of funerals exceeding $8,000.
Contrary to the perception of being prohibitively expensive, life insurance need not strain budgets, particularly for millennials seeking affordable coverage. Term life insurance emerges as a viable option, providing coverage for a specific period, typically ranging from 10 to 30 years. In the event of death during the policy’s active period, beneficiaries receive a death benefit.
Compared to whole life insurance, term life is considerably more affordable. For instance, a 30-year-old nonsmoker can expect to pay an average of $26 per month for a 20-year term life policy with a $500,000 payout, as per data from Policygenius. This is in stark contrast to the $440 monthly premium for whole life insurance with an equivalent payout.
To secure a cost-effective life insurance policy, it is crucial to shop around and gather multiple quotes. Seeking clarity on policy terms from insurance agents is advised, and conducting independent research enhances the decision-making process. While it may seem challenging to add another expense to the budget, obtaining life insurance at a younger age can lead to long-term savings.
