One of the big issues in the life insurance industry overall in the last several years is the fact that many people are wary of the investment that buying such a policy takes. However, if it's young people who are concerned about that potential cost, it might be wise for experts to do a little more research, because the sooner they start building up their coverage in this regard, the more affordable it's generally going to be.
Today, only about 1 in 5 consumers in their 20s or 30s say that they're likely to buy life insurance, but most experts believe that this is probably a pretty big misstep, according to a report from financial news and advice site The Street. Experts generally point out that when people sign up for life coverage, the risk they carry will be assessed at that time, and likely never again over the life of that policy. So for example, if a person in their mid-20s who is in good physical condition takes on a policy at that time, they're going to be treated by their insurer like the fit 25-year-old for potentially decades to come.
Why is that beneficial?
It stands to reason that relatively healthy people in their mid-20s or even early 30s are going to be at less risk for dying, meaning that insurers are less likely to pay a death benefit any time soon, the report said. That, in turn, means that insurers generally feel as though young people have decades to build up and fully fund their policies. In addition, locking in a low monthly premium can also be a good idea in their mid-20s because the fact is that inflation is going to make it so that any dollar value they pay now is going to be worth less in a decade or more, giving them additional savings in terms of value if not the actual dollar amount.
What can young adults do?
So when it comes to actually shopping around for and then finding the best possible deals that fit their personal needs, one thing that millennials are going to need to keep in mind is that this isn't a "set it and forget it" situation, the report said. What may be right for them now, in 2015, might not be right for them even by the end of 2016, let alone 2025. A lot can change in a year, or a decade - for instance, they could very easily have a new baby at this time next year, and more than one even a few years from now - so consistently revisiting options here is not only smart, it's vital.
The more that life insurers can do to reach out to young adults in particular and highlight to them the benefit of locking in a great policy that works for them now and going forward, the better off both they and those young people are likely to be in the future.