Over the last few years, life insurance companies have started to slowly but surely rebuild the enrollment numbers that took such a big hit during and even after the recession, but one group is still largely absent from the market. The youngest group of adults is still largely going without life insurance, but experts have been urging them to get this type of coverage for years now. And while these efforts have paid off in some ways, many believe millennials still have quite a ways to go when it comes to finding out about and actually buying life insurance.
There are many reasons that young adults, even those without families of their own, may need life insurance in case anything were to happen to them, according to a report from Forbes. These are things that those who have limited experience with the financial particulars of dealing with an untimely death.
What's the biggest concern?
For one thing, those who pass away unexpectedly without having such coverage may be leaving behind significant debts, such as those for credit cards, auto loans, or even tens of thousands of dollars worth of student loans, that could - and in many cases, do - get passed on to someone in their family to cover, the report said. That could mean that parents, or even a spouse and child, could be saddled with debts that add up quickly and significantly, and for which they have little to no financial help to deal with the mounting balances. While some lenders allow for debt forgiveness in the event of a death, many do not.
Other issues that can arise
In addition to all that, there are also the concerns that often surround funeral arrangements, the report said. While many young people may not think about it, the cost of a funeral often runs to several thousand dollars or more, and that's another issue that could leave their loved ones saddled with plenty of debt that can take years to pay back if they don't have a life insurance policy that helps to cover the costs.
This also doesn't get into the fact of providing some replacement income for young families that likely counted on the young adult to bring in money each month to cover basic living expenses, either.
One of the big issues that life insurers may run into over and over when it comes to dealing with millennials is that these young adults have little experience with or knowledge of life insurance in general. Therefore, the thing that might be most important for life insurers looking to connect with these young adults is education efforts, particularly when it comes to the cost of such coverage. Young people tend to significantly overestimate how much life premiums can cost them each month, often with dramatically larger gaps even when compared with other consumers who don't fully understand the true cost. As such, instructive efforts here could be extremely illuminating, and beneficial for both sides.