Published by Trustmark Voluntary Benefits on February 6th, 2019

Young people - you have a lot on your plate. You are focused on establishing a career path, you may be managing student loans, and you’re getting your life started. Because of this, life insurance isn’t at the forefront of your mind, although ironically, it is for these very reasons that you should be thinking about a life insurance policy. Your responsibilities are increasing and, as responsibilities increase, there is more to protect. If you’re still not convinced, check out these ways that young people can benefit from having life insurance.

  1. Rates- Age is one of the primary factors influencing your life insurance premium.1 Given that insurance rates are based on risk assessment, it makes sense that a policy paying out a death benefit would grant a lower rate to a younger, low-risk person. Individuals in their 50s and 60s face much higher costs when buying life insurance. Therefore, it is beneficial to buy life insurance in your 20s or 30s because your premium will be lower and, with the right kind of policy, it won’t increase due to age.
  1. Debt- Many young people are all too familiar with debt. Fortunately, life insurance can also be used to cover any debts left behind after you pass away. That means it can help with student loans, credit card debt, car loans and any other money you owe. Imagine, in addition to the cost of a funeral and their own bills, that your loved ones also become responsible for paying any debt you leave behind.
  1. Prepare for the Future- If you haven’t already started a family of your own, understand that life insurance protects your future spouse and children from carrying your debt as well. So although you might be single now, you are in a position to get the best rates on a life insurance policy that will benefit your future family.
  1. Funeral Costs- Covering the cost of a funeral is often thought of as the sole purpose of life insurance. While this is a common misconception, it is still a very important factor to consider at any age. Particularly for young people, putting aside money for a funeral may seem like a concern for the distant future not worth investing in quite yet. In fact, 60% of millennials feel that paying for expenses such as internet, cell phones or cable is more important than purchasing life insurance.2 To put it into perspective, as of 2017 the average cost of a funeral ranged from $6,260- $7,360 not including the cost for the cemetery, obituary, catering, or the headstone.3 While at first it may not seem essential, protecting your loved ones from the stress of a nearly $10,000 price tag during such a difficult time, is worth investing in.
  1. Long-term Care- Long-term care is an unsung hero that is found on hybrid life insurance policies. Contrary to the popular belief that life insurance is only useful for its death benefit, some policies offer long-term care benefits that pay while you’re still alive. Typically, this benefit is issued when you require long-term care such as assisted living, home healthcare or adult day care; which can cost anywhere from $200-$300 per day.4 This again might feel like a distant concern, but 40% of people currently receiving long-term care are between the ages of 18 and 46, and 70% of people over age 65 will eventually require long-term care.5,6 Perhaps due to an accident or injury, or simply aging, you may find yourself in need of care and a life insurance policy with long-term care benefits can help you prepare for those costs.
As a young person, take advantage of the life insurance options that are available to you. When educating yourself about life insurance and various policies, it is important to know the type of plan that makes sense for you. Take the time to create a budget, consider your life trajectory, and be sure to fully understand your policy. Once you have a life insurance plan that fits your needs, you’ll sleep better at night knowing that you and your family are prepared and protected.
 
1 “What Factors Determine Your Life Insurance Premiums?” Term Life Insurance Saver. https://www.mcmha.org/factors-determine-life-insurance-premiums/
2 LIMRA Study Finds Employers Interested in Offering Voluntary Benefits. LIMRA. September, 2014.
3 Statistics: Costs. National Funeral Directors Association. 2018.
4 Costs of Care. LongTermCare.gov. 2017
5 Genworth. The Expanding Circle of Care. 2015.
6 Startling Facts about long-term care. lifehappens.org. Mar. 11, 2015.