Is It Time For Millennials To Think About Life Insurance?

What is something on every twenty-somethings’ mind? Retirement by 50? Pursuing their dream career? Financial stability?

How many times has a someone under 30 said, “I need some life insurance.” It wasn’t on mine until about a week ago. But I’m here to tell you as your peer, maybe it’s time to start thinking about what some of that paperwork in your employee benefits package actually means.

I bring this is up because I know as Millennials social media sorta, kinda has our priorities all over the place and the older generations still call us “kids”. I know we’re so busy hustling to build our dream career, we overlook our overall well-being and don’t get those routine screenings, check-ups and physicals for reasons ranging to money to believing sleep is a panacea.

I’ve been hindered by the fear of out-of-pocket expenses; although, I have health insurance. How is that possible? Even with health insurance, I’m scared to get a doctor visit bill. And I’m not alone, according to a survey conducted by Amino and Ispos, two market research companies, 27% of Millennials avoid the doctor in fear of costly medical bills and 50% opened a medical bill to find it fell outside their budget. I can attest that happened to me twice and my eyes nearly popped out the sockets when I saw the total due amount.

Now I’m not going to explain to you why you need health insurance cause your life needs it. I want to use this post to say maybe it’s time to start thinking about life insurance.

What is life insurance and how does it work?

Life insurance is defined as a protection against financial loss that would result from the premature death of the insured. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured. The benefit is paid by a life insurer in consideration for premium payments made by the insured. (Investopedia)

Basically, life insurance is coverage that activates after the death of the policyholder that would go to the person who is listed to receive the death benefit and/or cash value from the insurance company in either full or partial amount. Sidenote: This is why there are so many stories of husbands, wives, and children doing sinister behavior to receive the life insurance money.

A couple of weeks ago, I watched a video of Dr. Boyce Watkins on the Breakfast Club discussing black ownership, life insurance, and stock market investments. This video easily became the most influential video I watched so far in 2017. Don’t worry I’ll link it at the end of this post. That video caused me to remember how the HR director at my job mentioned life insurance was free if you enrolled with the company. So yes, talking about life insurance sounds grim, but I promise you may want to give it a second thought.

Let’s look at two types of life insurance policies:

1) Term – Term is the most straightforward and popular as it’s active for the specified length of time you choose the coverage to last, typically at most 30 years. Term policies have death benefits but no cash value because you’re just paying towards the premium, which makes this the ideal policy for young people and those with little to no health concerns as it’s a cheap and can offer up to six-figure coverage

2) Permanent – A permanent policy covers your entire lifetime and comes with a cash value that accumulates interest and has higher premiums. Unlike term insurance, permanent you don’t need to renew your plan.

Now those are surface definitions because term and permanent are just an umbrella of the wide choices of life insurance that is out there, but they’ll typically fall under either category. I’m no expert, if you’re really curious I suggest asking a certifed life insurance agent.

How much insurance do I need?

There’s no general answer as it depends on what how much coverage you feel is needed to cover medical expenses, funeral, debt, and how much you want to leave behind so your family does not experience a financial burden. Once again, ask an agent as this is a number only you and a professional can figure out after going over all factors.

How do you get life insurance?

I’m glad you asked or was about to ask. The easiest way to get life insurance is through your employer.  Whether you’re working a job or a career (soon-to-be me, speaking it into existence) consider enrolling in the company’s plan. And don’t take these benefits for granted as retirement, life insurance, medical insurance, dental insurance, and paid leave are optional and not legal benefits required by law.  If you’re unable to get insurance from your employer, you can always shop around on your own and find a certified agent who can walk you through the process.

Is life insurance expensive?

It can be, it’s insurance. But there’s no need to think you would face having to pay your rent or life insurance because the truth is–there are premiums that can cost under $30 a month. The cost to a 25-year-old smoker to a 25-year-old nonsmoker isn’t the same. A life insurance monthly statement will not put you in the hole but should be considered in your expenses.

Do kids need life insurance?

I wouldn’t say life insurance on children is pointless, but I do understand it’s unfathomable for parents to even think of burying their babies, let alone seeing them in a hospital bed. Dr. Watkins made a very valid point that at the end of the day it’s about a peace of mind knowing in case the unimaginable happens the least of the everyone’s worry is out-of-pocket expenses. The responsibility to insure your child’s life is just as important as you putting money to the side for their college tuition.

Is life insurance just for funerals?

Inheritance, college fund, paying a mortgage, retirement cash flow, and estate starter are some ways having life insurance can come in handy.

Overall, the point of life insurance is secure financial security in the moment that life has other plans. If I made you start thinking about life insurance just a little bit, this post fulfilled its goal. Listen I know we’re young, trying to retire by 50, and letting social media run our lives. But remember: We’re getting older and one day we’re not going to be twenty-something anymore preaching to our kids about life insurance. Sounds boring but would you rather be bored or leave your family broke?

Now because I’m all about us Millennials having our shizniyee together, I’m linking some additional reading material for y’all to READ and the link to WATCH Dr. Boyce Watkins’ interview on the Breakfast Club.

Supplemental Reading

Types of life insurance

What is life insurance?

What to know about life insurance

Dr. Boyce Watkins on Breakfast Club