Life insurance is one of the most misunderstood forms of insurance coverage. How it works, why it’s necessary and what defines quality coverage are all common questions. And for younger generations struggling with debt, life insurance is simply not on top of the priority list. As it stands, millennials are purchasing too little life insurance or choosing not to invest in coverage all.
The millennial generation is most at risk for financial hardship due to inadequate life insurance coverage, according to New York Life’s most recent Life Insurance Gap Survey. The survey found that millennials with life insurance have a self-reported life insurance gap of $352,000, with enough protection in place to cover only 22% of coverage needs in the event of a breadwinner’s death.
When it comes to purchasing life insurance, the sooner the better. Don’t miss out on the opportunity to build a formidable financial support system.
Life Insurance Sets Up a Financial Foundation
Contrary to popular belief, you don’t have to be middle-aged or even have started a family for life insurance to be a worthwhile investment. In fact, establishing a life insurance policy early on could be a smart way to set the tone for your financial future.
For young adults just starting to build their finances, such a policy could be the safety net that makes all the difference. This age group typically has yet to amass significant savings or a retirement plan and life insurance could ensure that a future spouse or children are provided for under any circumstances.
Even if you don’t have anyone depending on you just yet, you’ll be thankful to have gotten a jump on investing in your family’s future early on. It’ll put you that much closer to your financial goals later in life.
One of the clearest reasons why you shouldn’t wait to start a life insurance plan is because of how affordable rates are for young adults. A policy’s cost is affected by a wide range of factors, but your age and general well-being are chief among them. So, beginning a policy when you’re young and healthy means rates are likely as low as they’ll ever be.
In some cases, a life insurance policy could be as inexpensive as just a few dollars each week, and it may be wise to begin injecting some funds into your plan even before you begin having children or purchasing a home. The more expenses you take on, the less available money you will logically be able to apply to your policy.
Anticipation is key when it comes to insurance – protecting against an uncertain future is its very nature – so the time is now to set aside your misconceptions and start planning ahead, especially while you can still take advantage of incredibly low rates.
Adjustable to Your Needs
Just as the rates for life insurance vary based on your specific situation, you may be relieved to know that there is no one-size-fits-all approach to the kind of policy you can acquire. How much you invest and how much coverage you attain are up to you. You can customize your policy to your budget and your lifestyle.
If you are able to pump up your policy, feel free to take on a more ambitious premium. However, if you don’t have the means, be careful not to over-invest in your policy. It’s better to have a modest plan than none at all.
Take it slow with a term life insurance plan and amp it up once you’re comfortable. Just be sure to leave the option open to convert your policy into whole life insurance, which offers an entirely different set of benefits.
Priceless Peace of Mind
At its core, the concept of life insurance may feel a bit morbid. After all, its key benefits only kick in once the insured individual passes away. But the benefit to the surviving loved ones is undeniable. With a life insurance policy in your back pocket, you’ll be able to rest easy knowing that the people who matter most will be protected if disaster strikes.
Whether you already have dependents or not, it’s never too early to begin paying into your life insurance plan. No one can predict the future, and you never know when tragedy may occur. However, once you take precautions, you’ll be better equipped to set those worries aside and focus on enjoying life.
More than laying the groundwork for your financial future, your life insurance plan puts in place a support system that will provide for your family long after you’re gone. That’s a peace of mind that cannot be effectively quantified, no matter what your premium is.