Millennials need life insurance too
While the life insurance market is growing globally, there is one group that is being left behind.
Millenials, those born between 1980 and 2000, are failing to grasp how important life insurance is and how much money they can save by purchasing life insurance while they are still young and healthy.
Many millennials have substantial deb in the form of mortgages, student loans, car loans and credit card balances.
They also have plenty of insurable risks, such as a spouse and children.
However, a recent survey found more than half of them have no life insurance at all, which is leaving their loved ones tremendously exposed.
The survey uncovered a couple of key reasons these young Canadians haven’t protected their dependents with insurance.
Over two-thirds of those surveyed didn’t seem to be aware of the types of liabilities life insurance can cover.
The basic concept is this money could and should be used to help pay off debts, so your surviving spouse isn’t left behind with a single income and a debt load taken on when two incomes were coming in.
Likewise, most millennials didn’t comprehend life insurance is absolutely imperative when you have children so they can be provided for if something happens to you prematurely.
The common belief is life insurance is only used to pay for end-of-life expenses such as funerals.
And, of course, nobody thinks they will die young, so why bother?
Those surveyed who had considered life insurance, but hadn’t set any up yet, stated cost as the top barrier to doing so.
I have to say the life insurance industry is largely to blame here since many licensed insurance salespeople try to talk consumers into elaborate and expensive whole-life or universal-life policies that they really don’t need and likely can’t afford.
The truth is most millennials with the above-mentioned debt and insurable risks don’t need a permanent insurance policy and only need the much cheaper term insurance.
If we look at the mid-age range of the millennial group, those age 27, and assume they need $500,000 of term insurance, the cost would only be around $23 per month for a male or $17 per month for a female.
I know these young Canadians have many other financial priorities such as paying down debt, saving for a house or buying a couple of Starbucks coffees every day.
But, I’m pretty sure term insurance can fit into all of their budgets.
You don’t even have to meet with an insurance agent anymore as the entire process can be done online.
Check out to see how cheap a term policy really is and how simple setting it up can be.
I also realize the target age group I’m referring to here may not be the ones that are reading this column today.
So it’s up to the parents and grandparents of millennials to pass this important information on and help them understand why life insurance is so important and easy to obtain.
Brett Millard is the owner of Speir Wealth Management in Kelowna. Reach him at brett@speirwealth.com.