The Millennial’s Guide to Life Insurance

According to the Brookings Institution, the millennial generation is defined as those born between the year 1981 and 1996. Consequently, this means that a millennial could be as old as 42 in the year 2023, or as young as 27. With a 15-year gap between oldest and youngest, millennials could very well be at various different life stages, whether that’s finishing a degree or attending your child’s middle school graduation. Wherever you’re at in life, purchasing life insurance is a good thing to start thinking about if you haven’t already. Millennials on the younger end of the spectrum might not have even considered it, whether because they believe they’re too young and healthy to consider it or because they’re too caught up with managing their personal life.

All this is to say that, as insurance experts, we believe there’s really no “perfect” time to purchase life insurance – but it’s important to know just how quickly life can go by. In just a few years, you might have a home loan to pay off and multiple young people and a partner depending on your income.

Purchasing life insurance as a millennial is a smart financial decision, not just for yourself, but also for those that you love and accounting for their future in the event of your absence.

Millennials and Life Insurance: Why Buy?

The most important question of all is: why buy life insurance? To be clear, life insurance is just one option of a million potential financial investing decisions you could make, and not everyone’s situation necessitates the purchase of life insurance. However, for many, it’s sufficient peace-of-mind and can make you feel secure in knowing that your loved ones have protection in the event you should pass away prematurely while they still rely on your income.

The goal of life insurance is inherently rather simple: it is designed to cover your dependents (presumably your loved ones) financially upon your death.

We all hope for long, happy lives, and we never want to think about dying during a time where our families depend on us so much. But, if you were to suddenly pass away, a life insurance payout could be used to help your partner and children pay off debts, cover expenses, and maintain their standard of living without having to sacrifice a retirement income.

The exact coverage of a life insurance policy varies depending on the insurer. Usually, with most policies, an insurer will agree to pay your dependents a certain amount upon your death, assuming that the policy is still active and hasn’t been cancelled/voided prematurely.

What Type of Life Insurance is Best for a Millennial?

Everyone’s lifestyle and needs are different, so technically there’s no specific type of life insurance that works well for an entire generation. Remember that the youngest and oldest millennials could be 15 years apart, and 15 years is a lot of time for a lot of life to happen. As such, you might imagine that everyone’s needs are very different from each other.

Either way, it’s important to know about the main two types of life insurance – term life insurance and permanent life insurance.

Term life insurance is perhaps the most popular form of life insurance, especially because it offers coverage for a set period – sometimes 10, 20, or even 30 years. Dying within the policy term means that your named beneficiary would receive their death benefit. If you happen to outlive the policy period and do not convert your policy to a permanent variation, your policy would end and there would be no payout to you or your beneficiary.

Permanent life insurance does not expire and may cover you for the entirety of your lifetime. The coverage lasts so long as you continue to pay your premiums. Plenty of permanent life insurance policies will also have an investment component, often referred to as cash value, which grows on a tax-deferred basis. Permanent life insurance also tends to cost more.

It’s important to note that term life insurance is generally the most common option because some people only need coverage for a set period of time. It’s easy to understand, cheap, but it does come with an end date, so it won’t cover you for all of your life.

For millennials, in those 20 or 30 years of your policy, you may no longer have the same financial obligations as you had prior. You might have paid off your mortgage, have your kids out of the house, and have paid off all your debts.

Costs & How to Get Started on Life Insurance for Millennials

Excalibur Assurance has access to some of Canada’s top life insurance carriers, which means we can help you get quotes from any number of providers to get you the best option. Of course, you shouldn’t just go with the first insurer you find that offers the type of life insurance you’re looking for.

The benefit of working with Excalibur is that an advisor of ours will get to know you and your needs, so they can help you find the most affordable option for your current budget, your dependents and their needs. They may also help you to find coverage even if you have an underlying condition, which can oftentimes mean a hefty premium.

Note, as well, that life insurance costs differently depending on a few different factors.

• Your current age. Younger and healthier people in their 20s/30s pay less than people in their 40s or 50s. Millennials have a strong advantage.
• Gender. Women may pay less for their life insurance than men, since men’s life expectancy is shorter than women’s on average.
• Current health status and underlying health conditions. Being severely overweight can also contribute to higher premiums.
• Smoking. Being a non-smoker bodes better for your premiums since you’re at a reduced risk of developing lung cancer than if you smoked.

All in all, millennials and Gen Z (or “Zoomers”) may pay the least for their life insurance than other age groups, simply because they are younger. It’s important to take hold of your finances now rather than later, and avoiding pushing off the decision as much as possible.

To get started, give Excalibur Assurance a call today to discuss our life insurance options and to find the right policy for your needs. With us, you can safeguard the life you enjoy and the people that you love.