What Millennial Professionals Need to Know About Life Insurance

iQuanti: In recent research conducted by LIMRA in 2022, a third of millennials now feel an increased need for life insurance. However, it's important for young professionals to understand that employer-provided life insurance may not provide enough coverage for their needs. 

Other options that might be more suitable include whole life, universal life, and term life insurance. Here are a few things that millennial professionals should know about life insurance.

Employer-provided life insurance may not be enough 

Some millennial professionals may work with an employer that offers life insurance. Employer-provided life insurance is typically about one year of an individual's current salary. While the option may come at a low cost or even be free, the coverage amount may not be enough for millennial professionals with dependents. 

It's often recommended that individuals get a life insurance coverage amount that's at least 10x of their salary. It's also recommended that an additional $100,000 should be added for each child. In addition to providing a family financial stability, debts such as mortgages and student loans should also be factored into the coverage amount. 

Why Millennial Professionals Should Start Thinking About Securing the Future

Here are some reasons millennial professionals should start thinking about securing the future for their loved ones, businesses, and even their elderly parents, along with some best practices.

Family

The most common reason people get life insurance is to take care of their families. This means more than just getting a policy that pays out enough to support your loved ones when you're gone. Getting married often prompts couples to have hard financial conversations, and it's not a bad idea to discuss life insurance while you're at it. You may consider getting a policy if your spouse depends on your income to fund your shared expenses (or vice versa).

Once you have children, you almost always need life insurance. If something should happen to you or your co-parent, a life insurance policy will help your family handle expenses. 

Student Debt

If you have a cosigner on your student debt, those cosigners, usually parents or guardians, can be responsible for your debt if you pass away. One way to help ensure that parents or other cosigners aren't stuck paying off your debt is with a life insurance policy covering the payoff amount on your loans.

What Kind of Life Insurance Should You Buy as a Millennial Professional?

Here are a few types of policy options that can offer adequate coverage.

Term life 

Term life insurance is a policy that offers coverage for a specific time period known as a term. If the policyholder dies during the term, the beneficiary will receive the insurance coverage amount. Term life policies usually last anywhere from one year to 30 years. Term life policies are typically the most affordable option. For example, a 25-year-old male could get a $250,000 policy at a monthly cost of $17. Term life can be a good policy for people with young families. For example, millennial professionals can choose a 20-year policy, which could be enough time for their children to be financially independent. 

Whole life 

Whole life insurance provides coverage for the duration of a policyholder's life and provides a savings component known as cash value. A portion of every premium payment goes towards building the cash value. As it builds over time, the policyholder can choose to borrow against the cash value or withdraw some of the funds. The funds can be used to pay the premium or cover other expenses. Millennial professionals may want to consider that whole life insurance typically costs more than term life insurance.  

Universal Life 

A universal life policy is a type of permanent insurance that allows a policyholder to raise or lower the death benefit - raising or lowering the death benefit results in an increase or decrease in the premium. For example, a millennial professional could increase their death benefit as their income rises or their family grows and decrease it once their children are financially independent. Universal life insurance offers the same features as whole life insurance in providing lifetime coverage and cash value. It's important for millennial professionals to research life insurance options and consider purchasing it for their family's future financial protection.

How Much Life Insurance Do I Need?

The last thing you want to think about in your twenties is your own death. It's difficult enough to juggle social plans, your personal life, and your career, let alone plan for what could happen to you decades from now. Financial planners often recommend getting at least five times your salary in coverage. Starting young can help take advantage of lower rates for coverage.

Fidelity Life offers a variety of term life plans for millennials with coverage lengths of 10 to 30 years and coverage amounts of $50,000 to $2 million. Learn more about Fidelity Life's wide range of term life insurance policies and coverage terms at a low monthly premium. 

Fidelity Life can help you choose the right plan for you and your family with our simplified process. We can help you choose a life insurance policy that meets your needs and budget and get a quote online or with the help of a licensed agent. We'll walk you through the application and purchase process, and coverage often starts on the same day.  

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