Born into the age of technology, Millennials are living a fast-paced, plugged-in lifestyle, balancing new careers, young families, settling into first homes, and actively advocating for causes that are close to one’s heart.
With many balls in the air, it makes sense that securing life insurance may not be at the top of your priority list, but there are in fact a number of key benefits to support looking into a life insurance plan while you’re young.
So, while it may not be as Instagram-able as your plate of avocado toast, we’ll share with you why life insurance is an important purchase for the smart and savvy Millennial.
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Let’s Talk About Debt
Most Millennials are burdened with several outstanding expenses that they are working hard to pay off. In fact, many carry considerably heavier debts than their parents did at this same age, thanks to inflated costs of living, real estate, and education. Statistics Canada has confirmed that as a generation, Millennials’ incomes may be higher, but mortgage debt remains larger than the generations that preceded them.1
Homes aren’t the only things weighing down Millennials’ bank accounts. Many Millennials are left paying for their post-secondary schooling years well-beyond graduation; this isn’t surprising considering that the average cost of a college/university education in Canada is $7,000 per year.2 Factor in other costs such as accommodation, transportation, food and textbooks, and that number quickly grows.
So, what would happen to all this outstanding debt in the event that you were to pass away? More often than not, it would be passed on to a loved one; a spouse, your children, or aging parents. Having to deal with such a considerable expense, especially during a time of grief, can be financially and emotionally devastating. If, however, you are protected with a life insurance plan, this ensures that any outstanding debts may be paid in the event of your death, helping to safeguard your family and loved ones from absorbing this burden.
Protecting the Lifestyle of your Family
With many Millennials starting and growing their families, some have young children who are reliant upon their income to live. Even within dual income families, the loss of one income can be enough to put the family in a financially compromising position. If you are not protected under a life insurance plan and suffer an untimely death, not only would your young family lose your income, but they would also have to pay off the debts you leave behind, on top of final expenses (the average cost of a funeral in Canada is roughly $15,000).
By making the choice to invest in life insurance early, this ensures that should you pass away, any outstanding debts and final expenses are covered, and depending on your plan, your loved ones may also receive income replacement. With your income stream replaced, the lifestyle of your loved ones is not adversely impacted in your absence.
If you don’t have young dependents, your life insurance coverage can protect the lifestyle of your aging parents who may be living on a conservative retirement income and may not have the financial means to pay your outstanding debts and final expenses.
Life Insurance Rates for Millennials
Who doesn’t love a good bargain? Well, great news – as a young, healthy Millennial, chances are that you can secure more affordable rates on comprehensive life insurance coverage.
Since life insurance rates are based upon factors such as the age, health, and gender of the insured individual, you’re more likely to score a better rate as a young and healthy low-risk candidate. In fact, premiums on most life insurance plans tend to creep upwards with each year that you wait to buy life insurance, with a notable spike after 40 years of age.3 It makes good financial sense to secure coverage early if you’re keen to get the best deal.
Some life insurance companies will also consider the health of your immediate family members when determining your insurance premium. Since age impacts your risk of disease/illness, there are inherent benefits to securing your coverage while your family members are younger and are more likely to have fewer health concerns to disclose to your life insurance provider.
The Giving Generation
Millennials may be burdened with debt, but studies have revealed that they are trumping the generations before them in levels of charitable giving. Some Millennials are reportedly giving over twice as much time and money to valued causes than the Baby Boomers and Gen X givers.4
Great news for this generation of philanthropic superstars: life insurance can help promote collective action by allowing you to control what happens to your finances in the event of your passing. Most life insurance plans offer the option to leave a gift to a charitable cause that you value, helping these initiatives reach their long-term goals.
When it comes to leaving a legacy, you have several options as a policy holder. Charities can be integrated into your estate planning, or you can elect to name a charitable organization as the beneficiary of your policy. This allows the charity to receive tax-free benefits, allowing your gift to go even further towards helping those in need.
Find your best fit!
Young Millennials with a clean bill of health may have the opportunity to pick and choose from an extensive selection of life insurance options, with plans to fit every need and budget. Life insurance plans are categorized into two main categories: Permanent Life Insurance Plans, and Term Life Insurance Plans:
Term Life Insurance: Term life insurance is a great option for those looking for coverage over a particular period, such as while your debts (such as education, mortgage or credit card) are highest, or while your children are dependent upon your income. Term options offer coverage over a defined period (generally 10, 20, or 30 years), with the premium remaining fixed over the course of the term. Should you pass away within the term period, your debts may be covered and, if applicable, your income would be replaced. Once your term is complete, you have the option of renewing the policy for another term. Since you’ll be older upon the date of renewal, your premiums may be higher.
Permanent Life Insurance: With Permanent Life Insurance Plans, as a policy owner you pay the same fixed rate from the day you purchase the policy throughout your life. So, if you secure a permanent plan as a Millennial, you’ll always enjoy the same rate, even if your health status changes as you age.
With so many plans to choose from, picking the right plan can seem overwhelming. It helps to consider your priorities to determine how much coverage you will need in the event of your passing, and how long you would like to be covered for.
Would you like to help a cause that you champion, or ensure that your child’s tuition costs are covered?
Want to ensure that your parents are not burdened with your funeral costs, or are you looking to have your income replaced to support your young family?
Thankfully, you don’t have to make these decisions on your own. A trusted licensed insurance advisor can help guide you through plans that can help meet future financial priorities. The advisor will help you understand how much coverage you need to protect the ones your care about.
Another bonus: applying for life insurance is quicker and easier than ever, thanks to No Medical Life Insurance options, which allow you to secure coverage in just a few days with no doctors’ visits or needles required.
As one of Canada’s leading providers of No Medical life insurance plans, Canada Protection Plan is proud to help savvy Millennials get protected and safeguard their loved ones in the future. You’re busy enough already, so we’ll make it as convenient as possible to secure the peace of mind that you deserve.
Speak with your advisor or contact Canada Protection Plan for a no-obligation quote.
SOURCES:
- 1 https://www.ctvnews.ca/canada/millennials-have-higher-incomes-more-debt-than-previous-generation-statcan-1.4385846
- 2 https://www150.statcan.gc.ca/n1/daily-quotidien/190904/dq190904b-eng.htm
- 3 https://www.advisor.ca/insurance/life/when-should-young-people-buy-life-insurance/
- 4 https://www.forbes.com/sites/forbesnonprofitcouncil/2019/12/16/rethinking-philanthropy-for-the-next-generation/
The information contained is as of date of publication and may be subject to change. These articles are intended as general information only. A licensed advisor should be consulted regarding your specific situation.
