There are very few certainties in the world, but one thing is for sure – we are all going to die one day. While many of us don’t want to think about what will happen when we pass, ignoring this reality will likely leave our loved ones in a more difficulty position than they otherwise would have been.
According to the experts, more than 80% of millennials don’t have any form of life insurance and if this figure scares you, it should. If you’re one of the many younger generations who haven’t yet considered the importance of life insurance, it is time to start thinking about this and here’s why.
Who Will Pay for your Funeral?
One of the expenses that often go unconsidered before a person’s death is the burial itself and this expense can quickly skyrocket. According to the experts, the average funeral will cost between $7,000 and $12,000 while is likely out of the average Joe’s budget.
If you don’t want to put this cost to your family and friends, you’ll likely want to consider even a funeral policy that will help them to send you on your way without costing them an arm and a leg in the process.
How Can It Help Support Your Family?
According to the professionals, about 91% of the average households within the US require the income of both spouses in order for them to keep afloat. If you have a dependents, you need to seriously consider life insurance as a way for them to continue in the event that the worst should happen to you.
You will be able to decide how they utilize the insurance payout and in instances where your children are still young, it’s up to you to determine how much you’d like to go into raising your children and how much you would like for them to receive when they grow up.
Aren’t All Private Student Loans Forgiven Upon Death?
If you have outstanding loans at the time of your death, you might be forgiven in thinking that they will be forgiven when you pass, but unfortunately, this isn’t always true. While federal loans won’t follow your family around once you pass, there are a wide range of private student loans that will, particularly if you have had someone consign on your behalf.
How Much Does Life Insurance Cost?
Life insurance is generally more affordable when you’re young and you can usually get a much bigger policy for a fraction of the cost. It’s up to you to decide on the term and the conditions of the insurance, but a fixed term insurance policy is generally all that is required of someone in their 20s or 30.
You can generally expect to get about a $1,000,000 life policy for around $40 a month. Keep in mind that this will depend entirely on your personal situation, including your health and lifestyle.
How Do You Sign up for Life Insurance?
As companies target younger generations for life insurance, signing up for these policies has become easier and easier. These days, most of the application can be done online, via app-based platforms.
You might need to fill out some additional information in paper form – including having information submitted to the life insurance company via your doctor – but in general this has become a quick and easy task.
In What Situations Do I Need to Apply for Life Insurance?
There are certain instances where you won’t be able to do without life insurance, including when you’re purchasing a home. In this instance, you’ll need to purchase insurance that will at least cover the cost of your mortgage.
In many cases, a mortgage lender might not complete the process unless you prove that you have some form of life insurance in place, so make sure that you keep this in mind as you go about the process of purchasing your new home.
How Much Life Insurance do I Need?
When it comes to choosing how large or small your policy needs to be, this all depends on your specific circumstances so only you can determine what this should be. You’ll need to think about your debt, as well as the costs of living as they pertain to your family.
What is Decreasing Life Insurance?
If you’re taking out insurance simply to cover a debt such as a mortgage, for example, you’ll likely want to consider decreasing cover, which will decrease with every year as you begin to pay off the loan. As the overall policy itself begins to decrease, it’s very likely your monthly premiums will decrease a long with them.
Who Should Opt for Level-Term Life Insurance?
Those who have interest-only mortgages will benefit more from this type of insurance and that is because the pay-outs are usually fixed. The policy will only be in place for a specific period of time and the biggest pro is that your family will benefit from the same pay-out regardless of whether they were paid out a year after you got the policy or the year the entire policy expired.
What is a Joint Policy?
When you’re applying for an insurance policy, you can either opt for a single or joint policy. The single policy is one that covers each policy holder, while a joint policy will usually pay out for the first death – usually to the other partner.
This sort of policy is usually much cheaper because it only pays out once. It should be noted that this sort of policy is usually only beneficial to those couples who stay together and it can become complicated in the event that there is a separation. While this is not always possible to predict, it’s important to consider the pros and cons when making a choice about the best possible policy for you and your family.