An increasing number of people in the United States, especially young Americans, have taken a higher interest in life insurance over the past year. About 31% of consumers say that the coronavirus pandemic has made them more likely to buy life insurance within the next year, according to the 2021 Insurance Barometer Study from nonprofit industry trade associations LIMRA and Life Happens.
Millennials – or those ages 22 to 40 – were the most influenced; nearly 50% of those surveyed said they are now more likely to purchase life insurance because of COVID.
"COVID-19 has raised awareness about the important role life insurance plays in families’ financial security," said David Levenson, president and CEO of LL Global, LIMRA and LOMA. "Our research shows 42% of Americans would face financial hardship within six months if the primary wage-earner were to die unexpectedly.
"Young Americans, in particular, are at most risk — more than half of millennials have no life insurance coverage," Levenson said. "The good news is 48% of millennials say they plan to buy coverage in the next year. While we know not all will follow through, our industry needs to help these young adults get the appropriate coverage that will protect their families."
If you are thinking about buying life insurance, visit Credible to compare life insurance rates from multiple providers at once. You can also view different life insurance products or consider a long term or permanent life insurance policy.
One industry expert, Megan Cherry, a licensed agent and director of customer experience at digital life insurance company Bestow, gives five reasons why millennials should consider life insurance now:
1. You can lock in lower rates while young and healthy
Buying a life insurance policy when you are young and healthy with less medical history, and locking in low rates or getting permanent insurance can help save money later on.
"The younger and healthier you are, the most affordable coverage will be," Cherry said. "For example, a healthy 35-year-old woman can purchase a 20-year, $500,000 policy for as little as $20 per month. Unfortunately, none of us knows what our health will be like six months, one year or two-plus years from now, so it’s best to purchase coverage once you have financial dependents and lock in that pricing for your policy’s duration."
Check out Credible to see your coverage options and save up to 40% on your regular premiums by comparing life insurance quotes from multiple providers for different types of policies. Credible’s partner, Policygenius, can give your peace of mind by helping you schedule a medical exam, fill out paperwork and negotiate with the insurance company included in the regular life insurance cost.
2. Millennials are creating families of their own
After getting married and having children, many people depend on their partner or family members for financial support. Millennials are currently at the prime age for establishing families, so a life insurance policy can help with income replacement.
Many experts suggest that policy owners consider a premium amount that is at least the cash value of about five times their annual pay.
"Most couples rely on their partner for some level of financial stability, including splitting large budget items like rent or the mortgage and all the expenses of raising a family together," Cherry said. "With life insurance in place, your loved ones have a financial safety net in case the worst were to happen."
3. Millennials are buying homes
Millennials (even those without families) who are now buying homes should also consider buying life insurance with the policy’s cash value at least equal to the home's value. Currently the largest population of homebuyers, millennials can get a life insurance policy that is at least the cash value of their home to help get the mortgage paid off, preventing beneficiaries or heirs from having to scramble when figuring out what to do with the house.
4. Buying life insurance is easy for millennials
The advancement of technology has made buying things much easier. Many millennials shop for their groceries or even order takeout using virtual assistant tech like Amazon's Alexa or Apple's Siri. Same-day or next-day delivery has become an industry standard, and apps and plugins can quickly tell you if you're getting the lowest price for an item without having to comparison shop.
Purchasing life insurance is no different. Through a marketplace like Credible, you can quickly compare multiple providers for different types of life insurance at once and get a quote estimate by filling out quick information like your age, gender, zip code, desired coverage amount and policy length.
5. Your employer's coverage might not be enough
Many employers include life insurance as a benefit, but because it is job-dependent, millennials could lose this benefit if they switch jobs.
"It’s generally better to have individual life insurance outside of work, so you always have coverage in place – whether or not you switch jobs," Cherry said.
To sum things up
Millennials are already thinking more about life insurance policies, as about 66% of respondents in the 2021 Insurance Barometer Study say they have dependents under 18 living in their households. Additionally, the study found that 43% of millennials believe they're more concerned than other generations about leaving their dependents in a rough financial situation.
"The silver lining to this pandemic for our industry is that the awareness of the value of life insurance is at an all-time high," said Faisa Stafford, Life Happens president and CEO. "Twenty-two percent of insured Americans (29 million) believe they need more life insurance. For those without coverage, 59% say they need life insurance, which represents 73 million Americans.
"As educators about the importance of life insurance, we know that when people understand the need for life insurance and purchase it, they can take control of one important aspect of their financial futures," Stafford said.
If you are interested in life insurance and want to see what options are available to policyholders, visit Credible to get a quote in minutes or talk to a life insurance expert to get all your questions answered.
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