The millennial generation—those born between 1981 and 1996—are now in their late 20s and early 40s. Millennials are getting married, having children, purchasing homes, and planning for retirement. These milestones are the perfect time to purchase life insurance, but despite the importance of this type of insurance coverage, many millennials do not have it.
If you are a millennial, it’s crucial to protect your loved ones in the event of your death. One way to provide this protection is through life insurance.
Are Millennials Buying Life Insurance? Millennial Life Insurance Statistics
A 2023 study on millennials and life insurance has revealed that less than half of millennials (53%) do not have life insurance—even though 48% of those surveyed want life insurance coverage.
There were several reasons mentioned that millennials surveyed have refrained from purchasing life insurance coverage:
- 59% are overwhelmed by insurance processes
- 55% are confused by insurance processes
- 54% are concerned about higher costs of other insurance policies
- 25% are worried about covering the cost of insurance premiums in 2024
These millennial life insurance statistics reveal that understanding life insurance and knowing how to find affordable coverage would help eliminate barriers and make it easier for millennials to purchase coverage.
Millennials & Life Insurance: The Basics
Life insurance is a type of insurance coverage that pays your beneficiaries after your death. If you keep up with monthly premiums and pass away while the policy is in place, the insurance provider will pay the people described in the policy a death benefit payment, which can be used in a variety of ways, such as covering the cost of unpaid debts or funeral expenses.
While there are many different types of life insurance policies, the two main categories of life insurance are term life insurance and whole life insurance.
Term Life Insurance
Term life insurance is a type of life insurance policy that covers a specific time period, usually between 10 and 30 years. If you have term life insurance and die during the term the policy is in effect, the insurance provider will pay a fixed amount to the beneficiaries you named in the policy.
Generally, term life insurance is more affordable than whole life insurance coverage.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance policy that covers you for your entire life, as long as you continue to pay the plan premiums. Since your risk increases as you age, whole life insurance is usually more expensive than term life insurance coverage.
Why Millennials Need Life Insurance: 5 Reasons for Millennials to Purchase Life Insurance Coverage
Depending on the policy you choose, life insurance can cover a variety of expenses and debts to help your surviving loved ones and protect their finances.
Here are a few of the reasons millennials can benefit from life insurance.
1. Pay for End-of-Life, Burial, & Funeral Expenses
End-of-life expenses add up after your death, leaving behind a financial burden for your family. In 2024, funeral and burial expenses in Michigan are likely to be more than $8,000. That’s a significant cost that your loved ones, such as your parents, siblings, significant other, or children will have to cover.
Life insurance can help alleviate end-of-life expenses for your family by covering funeral and burial expenses, among others.
2. Give Your Surviving Loved Ones Peace of Mind
If you have a spouse, partner, or children depending on you, who will help cover your missing income after your death? If you are single, who will be left to cover your debts or end-of-life expenses?
Life insurance can offer financial support and provide peace of mind to your surviving loved ones. The death benefit payment can be used to pay for mortgage payments, everyday living expenses, childcare, and higher education costs as well as replace your income. If you have people who financially depend on you, you can continue that support with the appropriate life insurance coverage.
3. Access More Affordable Coverage Rates While Young & Healthy
Many factors go into determining life insurance premiums and coverage, but age and health play a significant role in how much you will pay for life insurance. By purchasing life insurance when you are younger and healthier than your future self, you pose less risk to the insurance provider and can lock in more affordable rates.
A healthy, young millennial who has few or no pre-existing conditions and is a non-smoker can often find life insurance coverage with lower premium payments compared to waiting a few years.
4. Prevent Family & Co-Signers from Being Stuck with Your Debt
Millennials are the generation of record-breaking student loan debt—not to mention credit card debt, car payments, and home loans. If you have debt and pass away, that debt could be passed along to your surviving family or co-signers, which means you would leave behind a significant financial burden for your loved ones.
By purchasing the right life insurance coverage, you can prevent family and co-signers from being stuck with your debt.
5. Expand Inadequate Workplace Life Insurance Coverage
You may receive life insurance coverage as part of your workplace benefits package. However, in many cases, your employer’s life insurance may not be enough to cover your debts and concerns. Additionally, if you are laid off or your employer goes out of business, that policy will lapse.
Depending on your financial situation, buying your own life insurance policy to expand workplace coverage may be a good idea.
How to Choose Life Insurance: Tips for Millennials
When looking for life insurance, ask family, friends, and colleagues for insurance provider recommendations, read online reviews, and call agencies to learn more about your options. It may be in your best interest to look for insurance providers based in your region or state, who will be more familiar with state laws and be able to offer you local knowledge.
Life insurance doesn’t have to be out of your budget. If you shop around and get multiple quotes, you can find coverage that works for your finances and future planning goals.
Contact Melton McFadden for Life Insurance Coverage in Michigan
At Melton McFadden, our experienced life insurance professionals can help you develop an insurance plan that protects your loved ones and gives you peace of mind. We are ready to guide you through the process of choosing a life insurance solution that works best for you and your family.
Whether you are looking to expand your current life insurance coverage or sign up for a new policy, we’re here for you every step of the way.
We’re here for you every step of the way. Contact us today or request a free quote to get started.
