Young and healthy? You should get life insurance. No, really. That’s because a life insurance policy has the potential to be so much more than a payout to your loved ones if that thing none of us like talking about happens. So if you’re a millennial who thinks life insurance isn’t necessary, it might be time to think again–and we’ve got you covered with everything you need to know about millennial life insurance.
Forever young
The age of millennials is broad, but it’s safe to say that life insurance might not be a key requirement of theirs. That’s because anyone under 45 is probably thinking about the present rather than 15-20 years from now. It’s understandable to some extent, but–and if you’ll forgive our bluntness–it’s also perhaps just a little bit short-sighted.
We all want to stay young forever, but aging is inevitable, unfortunately. And while you might stay fit and healthy throughout your entire life, no one knows what the future holds. That’s why life insurance is something worth thinking about in those younger years, including in your twenties.
Millennial life insurance can set you and your loved ones up for the future, both in life and death. So let’s dig a little deeper and explore why you should consider coverage if you’re a millennial.
Benefits of getting millennials life insurance
No medical exams
Millennials have one major thing going for them when it comes to getting a life insurance policy: no medical exams (for the most part)! During your older years, you can expect to fill out a ton of forms, explain medications, and undergo a medical exam just to find out if you qualify for a policy. It’s time-consuming, and there’s a chance you could be rejected.
However, younger people can streamline the process. Many insurers use your prescription drug use and data from electronic health records to accelerate applications and remove the need for a full physical if you’re below a certain age.
Pay lower premiums
A straightforward application with no medical is welcome news, but the real win comes from not paying high premiums. The cost of life insurance depends on the risk, and a healthy millennial is generally regarded as a lower risk than other age demographics–especially if you’re female.
For that reason, you can expect to pay lower premiums if you take out a policy in your younger years. If you’re a non-smoker with no pre-existing conditions, the cost of life insurance will be lower than older demographics with similar health records.
What’s even better is if you take a permanent life insurance policy (more on that in a bit), you can lock in your premiums from an early age. Because perm coverage doesn’t expire, you will be paying the same premiums at 28 as you will at 58.
Use it while you’re still alive
No medical exams and lower premiums are great, but what if we told you that life insurance can work for you while you’re still alive? It’s much easier to think about policies if they serve as a form of investment for the future.
And that’s just what a permanent life insurance policy does. Your premiums are invested and can grow tax-free over time, which means you can access wealth while you’re still alive and still leave a significant death benefit for your loved ones when you do pass. Suddenly, the whole dynamic around life insurance charges.
Tell me more about accessing life insurance while I’m still alive
Cash value
A permanent life insurance policy has something called a “cash value,” which essentially means your coverage builds wealth over time and can be used while you’re still alive. All of a sudden, the conversation about life insurance changes from “how much can I leave my beneficiaries” to “how much can I leave them, and what can I access in the years ahead.
If you’re wondering how that works, allow us to explain. Your cash-value element grows along with the original coverage amount purchased. This means your cash aspect and death benefit increase together, with you paying into one pot to grow your wealth and another to protect your loved ones via a death benefit.
When it comes to accessing the funds later in life, you’ll still have a death benefit but will also have accrued wealth that can be used for whatever you like. Perhaps you want to send the kids to college, maybe you want to invest in real estate, or it could be that you simply want to enjoy retirement with extra financial resources.
Interest-free
The cash-value element isn’t the only benefit of perm life insurance. If you take out a policy, you can access the accrued wealth entirely tax-free. That’s because the money you withdraw comes as a 0% loan from yourself, with it being paid back through some of the death benefit when you pass.
Now, you can’t pay tax to yourself, so that loan is entirely tax-free. And because your death benefit has grown alongside the cash value, you’ll still have money left over when the loan clears. That’s good news because it means your loved ones still receive a payout.
Safeguard against market volatility
Unlike most investment types (which also require you to pay tax on earnings), a permanent life insurance policy isn’t affected by market volatility. Losing assets because of a market downturn is a common occurrence and a genuine worry for people. However, you don’t need to concern yourself with volatile markets when you have a perm policy.
It provides guarantees that other investments can’t because it has a floor and a cap, which means you never lose money but can access relatively high returns between 6-8%. So even if you have other investments in your portfolio, a perm life insurance policy can lower the overall volatility and give you more peace of mind.
Riders for critical care and injury
Permanent life insurance policies are highly customizable, allowing you to shape them to meet your needs. These come in the form of riders, which you can select when you’re choosing a policy.
One of these riders features critical care and injury cover. Essentially, that means you can access your death benefit while you’re still alive if you fall ill or injure yourself and cannot work. The rider includes an emergency fund that protects you and your family against unfortunate and unforeseen circumstances, so you don’t need to worry about struggling to provide if you’re taken out of action.
In conclusion: millennial life insurance for the win
The perception of life insurance is beginning to change, with more millennials than ever getting coverage during Covid. But you don’t need to wait for a global pandemic to benefit from life insurance, and getting coverage in your early years can set you up for the future, both in life and death. So why not cover all your bases and create an outlook for your future that looks promising for you and your family?