Why Millennials Should Have Life Insurance

by Lithium Technologies ‎10-13-2016 08:36 AM - edited ‎10-28-2016 03:04 PM (388 Views)

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Even the young need life insurance. Here are three reasons to consider getting it.

 

They are likely to have debt.

Two-thirds of all millennials (young adults born in the 1980s and 1990s) have at least one source of outstanding long-term debt, according to the most recent National Financial Capability Study. And while any heirs wouldn’t have to pay back a federal student loan, many private loans still have to be paid off if the borrower dies. Parents who co-signed on a private student loan, for example, could be obligated to pay off the debt if the millennial passes away. A life insurance policy can provide a sum of money to help those they care about cover the costs of a loan.

 

People may depend on them.

When asked how long it would take before surviving members of their household would have trouble paying living expenses when the primary wage earner passes away, 51 percent of millennials said the trouble would be immediate.* So whether the young adult has children, a spouse or other family that depend on him or her, they could face serious financial difficulty if the millennial’s income suddenly ceased.

 

It costs less than they think.

Although 67 percent of millennials say that daily expenses like rent and groceries keep them from purchasing life insurance, young people are most likely to overestimate how much a life insurance policy actually costs.* A term policy for a healthy 30-year-old can cost as little as $8 a month.** And with the potential to transfer to a permanent life insurance policy at the end of the term period, life insurance can be a smart choice for young adults wanting to take responsibility for the financial well-being of those they care about.

 

*Source: LIMRA 2016 Insurance Barometer study

**Rates indicated are for a $100,000, 10-year term, female, age 35, excellent health, non-nicotine user for Traditional Term life insurance.

 

AAA Life and its agents do not provide legal, tax or financial advice. Please consult your professional advisor prior to the purchase of any policy or contract. Life insurance underwritten and annuities offered by our affiliate, AAA Life Insurance Company, Livonia, MI. AAA Life is licensed in all states except NY. ALAN-23612-816-XX

Term life insurance approval is subject to health history and underwriting guidelines. Rates may vary. The answers provided to health questions are used to determine eligibility for coverage. Not all applicants will qualify. Product and its features may not be available in all states. Coverage ends at age 95. See policy for specific details of coverage. Policy form series ICC11-1201/TL-1201 (in OR: ICC-11-1201).

 

A version of this story appears in the November/December 2016 issue of AAA Living magazine.

 

To talk to an agent, stop by any AAA office or visit AAA.com/Life.

Image credit: Masterfile

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