- Best advice for recent college grads: Purchase life insurance
- June 3, 2015
As a graduate of the most indebted college graduation class in US History, I constantly find myself (and my fellow graduates) in rather complex financial decisions.
From figuring out how to tackle crushing student loans to grasping the concept of saving for retirement, we are overwhelmed with new financial obligations and planning for the future.
One of the things that millennials tend to put on the back burner is the importance of purchasing life insurance and ensuring that we have enough coverage. The sad reality is that the under 30 crowd is the most under-insured generation right now.
While many young, unmarried individuals have no immediate need for life insurance, there are cases in which single millennials should have a policy in place.
Top three reasons for millennials to purchase life insurance:
· Protect family members or co-signers against outstanding debts and student loans
· Cover end-of-life expenses
· Lock in a low price
Student loans and credit card debt are two of the biggest reasons why millennials should purchase life insurance, as young adults are accumulating larger amounts of debt quicker than ever before. A life insurance policy can be used to pay off any outstanding loans or debts so that this burden is not passed onto family members or co-signers.
That can happen when your debt is in a joint account or has been co-signed by a parents, guardian or relative.
Student loans are the biggest culprit when it comes to millennial debt.
Among those who took out loans, the average student who graduated with a bachelor’s degree in 2014 accumulated around $33,000 in student loans – almost twice the average debt burden of graduates 20 years ago, according to the Wall Street Journal. More than 70 percent of college students will graduate with student loan debt.
Government student loans are discharged if the student dies, but private one may not be.
According to a 2014 survey by Experian credit reporting bureau, two-thirds of millennials used a co-signer, which makes that person liable for any shared private debt.
Aside from outstanding debts and student loans, millennials should also purchase life insurance to help cover end-of-life expenses – a topic no one wants to talk about but should discuss.
Even a relatively healthy millennial can rack up hundreds of thousands of dollars in medical bills. Unfortunately, those bills don’t go away when someone passes away, especially if a friend or family member has officially agreed to help cover those expenses.
Any unpaid bills may be passed onto them.
Another unfavorable topic to discuss is funeral expenses. Nowadays, the average funeral costs $6,000. Purchasing a life insurance policy can help cover both of these costs, so your loved ones will not have to worry about paying them.
Lastly, purchasing a life insurance policy when you are young and healthy can could mean the difference between securing an affordable or unaffordable premium.
This is because life insurance premiums are largely based on the age and health of the applicant, so the cost of coverage increases as we age.
A CNN report finds that life insurance costs can nearly double for those who wait 10 years to buy a policy – and that’s assuming good health.
- Category: Articles Library, Homepage 6, Life Insurance, Personal Stories
Life Insurance Quotes
Leave a Reply