If you’re classed as being in the Millennial category then you’ve probably not even thought about Life Insurance? After all, it’s just for older people isn’t it?
As a group, the younger generation are increasingly postponing traditional milestones such as getting married, having children and buying a home – some out of choice, some purely due to affordability – so life insurance is being delayed too.
But is it worth you considering it whilst you are still young? As this age, it’s probably completely inconceivable to think about your own death, but what if the worst DID happen? We take a look at the benefits of having a life insurance policy in place.
It’s cheaper when you’re young
One of the main advantages to buying a life insurance policy while you are in your twenties is the cost. As a young and healthy adult, you’ll generally be considered as ‘low-risk’ to a life insurance provider, which should mean your monthly premiums will be relatively low.
If you smoke and drink, this could affect the price of your premium, but typically the younger and healthier you are, the more affordable your premiums are likely to be. Premiums tend to rise as you get older due to health issues that are associated with ageing.
You’re not invincible
Life expectancy in the UK is pretty good so we can all hope that we live to a ripe old age. But this isn’t the case for everyone. Nobody knows what’s just around the corner.
Youth often gives us a sense of invincibility and whilst your risk of getting a terminal illness or suffering from a heart attack is pretty low, the most common cause of death for those in their twenties and early thirties is accidental. (Office of National Statistics, 2017)
Funeral costs are expensive
Did you know that the average cost of a funeral in the UK is approx. £4,000? (Money Advice Service, 2017) Even if you’re idea of a funeral isn’t particularly traditional, it’s still likely to cost a lot of money and this burden will usually fall to your family or next of kin. Even if you don’t want to consider insuring yourself for a huge sum of money, taking out a policy which is enough to cover funeral costs and additional expenses can help your family to avoid financial hardship, at a time when emotions are already running high.
It’ll cover your debts
Left university with huge debts? Don’t worry, you’re not alone. The average student will likely graduate with over £50,000 worth of debt, which arises from a combination of student loans, credit cards and overdrafts used to cover tuition fees and living costs. (The Guardian, 2017)
Some student debt will likely be written off following your death but this may not always be the case. A life insurance policy may also be wise if you have borrowed money off your parents and are currently paying them back. Parents often place themselves in financial hardship to send their children to university, or to help them with a deposit for a house, but if you aren’t around to pay them back, their financial situation could be in jeopardy.
You have dependents
Life insurance isn’t a policy for you – it’s for the ones that are left behind after you’re gone. Don’t assume that having dependents is just about having children – it’s anyone who relies on you financially. It may be a partner who you share a home with, or perhaps a parent or sibling with special needs that requires your care. Whilst your death would cause emotional distress, the financial ramifications could also have a huge impact.
SoSmart Money are specialists when it comes to insurance advice. Trained expert advisers have access to the UK’s leading lenders and using their knowledge and skills will place you with the most suitable lender and product for your needs.
The above post is intended to be informative but does not constitute advice – financial, legal or otherwise. Any opinions given are the author’s own and do not necessarily reflect the views of SO Media.