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Are young people still going without life insurance?

Life Insurance and Annuities
by Scott Morrow
Women have significant need for life insurance
Women have significant need for life insurance

Over the past several years - more or less since the economic crisis came to an end - industry experts have been concerned with the number of young adults who are going without life insurance. While most age groups saw diminished enrollment after the initial onset of the recession, many age groups have returned to their pre-recession levels. But interest among millennials remains somewhat muted.

Several factors could be to blame for this, including the fact that millennials don't feel as though they have anyone to protect financially if they're unmarried or without children, as well as the (erroneous) idea that life insurance is something they really cannot afford. Indeed, many polls show that while most Americans of any age dramatically overestimate the cost of such coverage, the problem is particularly pronounced and more widespread among the youngest group of adults.

Young people may benefit from buying life insurance early, even if they don't know it yet.Young people may benefit from buying life insurance early, even if they don't know it yet.

Getting more knowledge
To that end, financial experts say the best thing that young people can do when it comes to being prepared for life insurance is work to gain a better understanding of how it works, why it is needed, and when to buy, according to a report from the consumer financial advice site Doughroller. One of the biggest reasons young people may not get it - the aforementioned notion that if they don't have a family to support, it's just not a worthwhile investment - is actually incorrect. The younger generation should consider funeral expenses and repayment of outstanding debt in order to ease the burden on spouses or dependents.

That is to say that life insurance can help to cover final expenses, leftover balances on things like credit cards, auto loans, and student debt, and so on, the report said. In addition, because many young Americans shy away from life insurance due to the perceived cost, they may simply be confusing term life insurance (which only lasts for a certain number of years but has a much lower price tag as a result) with whole life insurance (which lasts until a person passes away and is therefore quite expensive for younger people in particular).

Good news for millennials
It's also worth noting, though, that life insurance costs are heavily dependent upon the type of lifestyle and physical health a person has, according to Runner's World. As a result, those who work out, don't smoke, and are in generally good health - which is true of many millennials - may be in a position to keep their ongoing coverage costs down if they live relatively clean lives, and especially if they exercise regularly.

"Since running improves [good cholesterol levels] and keeps weight and blood pressure down, those who run may be at an advantage when it comes to being eligible for the best life insurance premium rates available from insurers," Steven Rigatti, M.D., a vice president and the chief medical officer at a major life insurer, told the magazine.

As a consequence, those life insurers that want to connect with a larger percentage of young adults in particular may simply need to do a little more education outreach to make sure millennials know what life insurance can do for them, and what it's actually going to cost.



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