Most of Generation Y and Z(Millennial and post-millennial) are not thinking about the end of their lives. Their lives are just beginning, and frankly, Life Insurance is not high on the priority list of products to spend money on. However, these young people are missing out on a very important, unique opportunity!
Young people that really need to consider life insurance can be divided into two groups. Those that are young and married and those that are young and single.Today I will address those that are Young and Single.
There is a saying that people buy Life Insurance, not for themselves, but for those people that they care about. The same saying applies for young singles as well. They should buy life insurance so that, in the event of their death, they do not leave current unpaid debts (credit cards, education, auto/home etc) for their families to sort out. There are also funeral costs and uncovered copayments/deductibles from health issues, that inevitably fall to their family or others. None of us want to add a burden financially to an already upsetting emotional event at the loss of a loved one.
Some of the other reasons for buying life insurance while you are young and healthy is that is easy to obtain, more affordable than it will probably ever be and it often locks in your ability to secure an affordable life insurance program when you are older, even if your health deteriorates.
Young people should purchase their life insurance in advance of needs. They should purchase a policy anticipating the possibilities of their own future family, or a mortgage or other debts, including possible business debts such as purchasing a building or franchise.
There are two key types of Life Insurance that Generation X-Y should be aware of: Permanent, and Term.
Permanent life policies, or Whole Life policies, are policies that can be kept in force for the duration of a person's life. They build cash value over time, and can be borrowed from in some instances, and the rate is fixed for the life of the policy.Permanent life policies, in this age of extremely low returns on safe investments, look more attractive than they have in the past century and they lock in a cost that will never rise. There are tax advantages to many of these products that make them more valuable than ever before.
Term life policies are temporary polices covering for a set amount of time. Most policies are written for 10, 15, 20, or 30 year chunks of time, and cover death benefits only. There is no cash value to the policy. Term life policy rates are lower and do not change for the duration of the policy. These policies can last long enough to get past debts or to provide for children until they reach adulthood.
The new generation of young singles are educated and financially aware. They are also conscious and concerned about their loved ones. Young people need to be engaged in preparing for the future now, rather than waiting for the sun to start setting on their lives before contemplating providing for their family. It is important for young people to know how these life insurance products will meet their desires to ensure their family will be protected no matter how their life unfolds.
by Dan Zeller, edited and revised by Adrienne Terrell
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