Life insurance is not something you should be concerned about if you are just starting out. It could cost you a lot if you delay.
Research has shown that millennials who have student loans to pay are unable to save money for other purchases, such as life insurance or buying a house .
About 7 out 10 seniors who graduate with some form of debt owe around $30,000 each borrower
Life insurance has a special benefit for students loan borrowers. A policy that covers the amount owed can protect those loans from becoming a burden on a loved one.
Private loans can be discharged even though federal student loans are paid off when you die. A private loan borrower who dies may have a co-signer to make subsequent payments.
According to SavingforCollege.com, about half of private student loans programs don’t offer death discharges.
You can also keep the loan balance, just like student debt. The lender may either require collateral to secure the loan, or take all your assets to repay the debt.
The business can also benefit from life insurance plans that provide financial protection in the event of a death.
Life insurance is a good idea if you have financial needs that cannot be met by your assets.
How do you find the right policy?
Financial advisors recommend young adults purchase a term policy to obtain maximum coverage with the lowest cost.
Term life insuranceCoverage is for a specific period, such as 20 years or 30. The policy expires after the term is up, unless the policy is renewed or converted to a permanent or whole-life policy. This can be more costly.
Whole-life insuranceThe, however, provides coverage for your entire life, provided you pay the premiums. These policies include a cash value account, which accumulates on an income-deferred basis.
Cost of life insurance depends on the amount and type you choose. It is often cheaper than what people expect.
An average 30-year-old male can expect to pay less than $18 per month for a 20 year term life insurance policy with a $250,000 mortality benefit. Policygenius is an online insurance marketplace. An average premium for a woman the same age is $15 per month.
As a general rule, you should aim to have a death benefit equal to 5-10 times your annual income. You can get more information from a financial planner about how much protection you will need.
The longer you delay buying life insurance, the more costly it will become. Policygenius reports that insurance premiums increase by an average of 8%-10% for every year you delay buying coverage.
You can choose from a variety of options, including those offered by MassMutual and MetLife. Although small and medium-sized insurers can be good, it is important to verify that they have a track record of success.
Learn about the company’s past in life insurance and review its records through the National Association of Insurance Commissioners database.
Many websites allow you to compare rates and purchase policies via their websites, including Policygenius.com and companies like MassMutual’s Haven Life or the start-up Fabric.
