What Every Millennial Should Know About Life Insurance

Millennials taking group selfie

If you are in your 20s or 30s, you may not spend much time thinking about life insurance, but maybe you should. Read on to find out why now is the right time to investigate life insurance.

As a rule of thumb, if you have loved ones who depend on you financially, or who could be affected financially in one way or another if you were no longer here, you should consider getting a life insurance policy, even a small one.

  • Who can be a dependent? Virtually anyone: a spouse, significant other, child or children, other family members, or even loved ones who are not blood relatives.
  • The longer you wait, the higher the cost, because lifetime premiums are based on your age when you apply.
  • The longer you wait, the greater the chance of being turned down later for reasons of health, hobby, occupation or military service.
  • If you plan to buy life insurance when you’re older, or fear that the monthly cost may be too high, remember that it’s OK to start small, to play safe and buy more coverage later.

Ask yourself these questions in the event that something suddenly happened to you:

  • How much money would my loved ones need to spend to cover my funeral costs?
  • Would my spouse or significant other have enough money to pay the rent or mortgage?
  • How much money would be needed to replace my share of household income?
  • Do I have a sizable amount of debt, such as credit card or student loans, that someone else would be responsible for paying?

Whole Life Insurance vs. Term Life

Generally, there are two basic kinds of life insurance – whole life and term life – either of which may make sense for you, depending your particular situation. Both have advantages.

Whole life policies provide coverage for up to a lifetime, as long as premiums are paid. Some people prefer whole life insurancebecause policies accumulate cash value over time – a nest egg that the insured can access in the future.

Term life policies provide coverage for a fixed period of time (or term). The Gerber Life Term Life Planoffers a term of 10, 15, 20 or 30 years. Some Millennials opt for term life insurance because premium rates are usually lower than for whole life coverage.

1 Policy Form Series SLT-05

2 Policy Form ICC13-SWLP, Policy Form Series SWLP-13

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