You might not consider yourself a millennial, but if you were born after 1984, most sociologists place you in that category. Most people in early adulthood are concerned with starting families, purchasing homes, and beginning to save for retirement. While life insurance isn’t often on that list, there are plenty of good reasons to make purchasing a term life insurance policy a short-term financial goal. In fact, Health IQ even offers special rates for customers who have an active lifestyle.
Why Buy Life Insurance in Your 20s?
Policies tend to get more expensive as we age, which means there is no better time to buy life insurance than in your 20s and 30s. With each birthday, policy costs tend to increase by 10 percent. Many millennials who aren’t yet parents or who don’t own homes think there’s no reason to have life insurance. But chances are, you have student loan debts, a car loan, and other obligations that would have to be settled if something happened to you.
Even if you are debt-free, you will likely have a partner or children, own a home, or start a business in the future. Purchasing a policy now when it is more affordable allows you to protect your family and assets into the future. Despite this, fewer than 20 percent of millennials have a life insurance policy beyond the one their employer offers.
Factors to Consider
Now that you know you need life insurance, the next step is to shop around for a policy. It’s important to find a carrier that offers policies compatible with your lifestyle. If you run, do yoga, or take other steps to improve your health and stay active, you can access discounts from insurance companies that work with Health IQ. If you have a chronic health condition and are managing it under a doctor’s care, Health IQ insurers also take that into account.
While most insurance companies allow you to make changes and other transactions digitally, others require correspondence through postal mail. If you prefer online communication, choose a provider who will accommodate that preference.
Types of Life Insurance
When shopping around for life insurance policies, it helps to know the lingo. A term life insurance policy is a low-cost policy that pays out if you die within a specified period, typically 10 or 20 years, though terms can range from 5 to 30 years. Look for a level-term policy, in which the premium cost remains the same each year, regardless of changes in your health. With whole life insurance, the premiums you pay are invested, and the payout is guaranteed for life.
Term life insurance is most appropriate if you only need a larger policy for a certain period, such as until your children are grown or until your mortgage is paid off. Permanent whole life policies are designed for those whose estates will need liquid assets after they die.
According to NASDAQ, most millennials opt for a combination of permanent and term life insurance, such as a small whole life policy, supplemented by a term policy with a larger payout. For most cases, though, it pays to keep coverage simple and focus on replacing your income and protecting your family.
How Much Coverage, and How Much Will It Cost?
While you likely have a policy through your job, chances are you want more protection than it provides. When coming up with a number, consider the following:
- Do you have a partner who relies on your income? How much money would it cost to pay off your mortgage or pay monthly rent for a number of years?
- Do you have children? What is the current cost for their care, and what are their likely college costs?
- Do you have loans with a cosigner, such as private student loans?
Think about what you want the life insurance policy to accomplish in the event of your death and how much money it will take to acquire that goal.
Barron’s notes that a 25-year-old in good health should be able to purchase a $1-million term life insurance policy for less than $60 a month. For a healthy 35-year-old, the same policy would be around $70 a month.
The Health IQ Advantage
At Health IQ, millennials can access special low life insurance premiums from some of the industry’s top insurance companies. If you lead an active lifestyle, you will be eligible for discounts specifically for runners, cyclists, weight lifters, swimmers, yoga practitioners, and other athletes. They also base BMI measurements on the waist-to-hip ratio for those who have a muscular build. Unlike many other insurers, Health IQ doesn’t penalize you for an adverse family health history when determining premiums.
Start today by accessing your quote through Health IQ’s convenient online system and ensure your family’s financial future will be protected for years to come. Or try our newest quiz and test how well you understand the Benefits of Life Insurance for Millenials.
Meet the Author
Zack Jenkins is a Health IQ Marketing Manager with a sports journalism degree from Pepperdine University and an endurance athlete, having completed 50 full distance marathons and 7 Ironman triathlons. When he isn't running or writing he can be found out and about with his camera.
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