Why Millennials Need Life Insurance
Updated March 05, 2023

9 Reasons Why Millennials Need Life Insurance

Saving Money

This article was sponsored by Bestow and contains affiliate links to their products. This means that Money Done Right may be compensated if you use links on this page.

You might think of life insurance as something to think about later on, but the truth is that it’s a good investment regardless of your current age.

Millennials need life insurance at least as much as older people, and it’s often an even better investment when you’re young.

Life insurance offers long-term financial protection for your family in the event of your death. Policies are extremely affordable for healthy, younger buyers. By getting coverage now rather than later, you’re locking in a lower rate for the same protection.

In this article, you’ll learn more about why millennials need life insurance and should consider obtaining coverage today.

1. You’ll Receive a Lower Premium

You'll Receive a Lower Premium

Life insurance rates are based on your health, age, gender, and other factors along with the length of the term and the amount of coverage, so you’re more likely to get a good deal if you enroll today rather than waiting.

Healthy non-smokers can receive even lower rates.

Non-smokers and people without preexisting conditions generally receive even lower rates. Different providers consider different criteria, sometimes including your lifestyle and family history.

If you’re approved for life insurance now, you’ll lock in a low rate for the entire length of the policy. The longer you wait, the more you’ll have to pay when you do decide to buy life insurance.

You may not qualify for life insurance when you need it.

In fact, you might not be able to get life insurance at all by the time you need it. Just as premiums grow as you age, you can be turned away if you have any preexisting conditions that threaten your health. If you’re approved today, you’ll be protected from an unexpected illness or injury in the future.

It’s fine if you’re not yet sure whether you need long-term life insurance. Consider looking for a short-term policy to act as a stopgap while you make your decision.

2. Your Employer May Not Provide Adequate Coverage

Your Employer May Not Provide Adequate Coverage

Many people receive life insurance through their employer and assume they don’t need other protection. On the other hand, employers may not offer the full amount of death benefit needed to meet your needs. It is often worth getting additional coverage even if your employer offers some protection.

With additional life insurance, you’ll have something to fall back on. This will be important if you exceed the limits of your employer’s insurance or you lose that coverage for any reason.

It may be more affordable to obtain your own insurance rather than adding to your employer’s plan.

Even if your employer allows you to add to your basic coverage, it might still be more affordable to get your own insurance rather than adding to your current plan. Premiums for employer coverage often go up dramatically as you get older. At the very least, make sure to shop around before going with your employer’s insurance.

Your employer’s insurance also won’t help you if you move to a new job or are fired from your current position. A term life insurance plan will be there as long as you continue making payments during the term. Reliability is one of the key reasons why millennials need life insurance.

3. Life Insurance Protects Your Family

Life Insurance Protects Your Family

One common misconception is that life insurance always pays out to your spouse. Your funds can also go to your parents or other family members upon your death. Life insurance is the best way to protect all the people closest to you.

Your parents could be beneficiaries.

If you’re paying back student loans that your parents took out, for example, they could be held responsible. Although federal student loan debt will be forgiven if you or your parent dies, private loans aren’t subject to the same regulations.

In fact, some loans allow lenders to request the entire balance upon your death. This could force your family to pay a potentially life-changing debt all at once at an extremely difficult time. A ten- or twenty-year term life insurance plan can give you coverage until your loans are paid off.

Don’t leave your loved ones unprepared.

Life insurance can help your surviving family members manage any debts and get back on their feet financially as they deal with the loss. The last thing you want to do is leave your partner or parents with a debt they can’t pay off on their own.

If you have children, a life insurance payout will help your spouse replace some of your income while they adjust to both making money and taking care of the kids. Life insurance gives you the peace of mind that comes from knowing your children will be provided for even if you’re gone.

4. It’s Easier Than Ever to Get Life Insurance

It's Easier Than Ever to Get Life Insurance

You might think that buying life insurance involves long sales pitches, but that approach is largely a thing of the past. Modern life insurance companies have adapted their practices to suit the desires of millennial consumers. You can get reliable coverage in just a few minutes.

Buying life insurance online also adds transparency to the process, making it easy to understand your options. Bestow offers term insurance policies of two, ten, and twenty years. They’re all available online and don’t require the medical exams that were once a necessary step in getting life insurance.

There are no restrictions or fees associated with cancellation, so you don’t have to worry about committing to a long-term agreement. Your rate will stay constant for the entire length of your term.

5. It’s Not as Expensive as You Think

It's Not as Expensive as You Think

People often think that they can’t afford to get life insurance, but the premiums are generally very low for young people in good health. Life insurance is something you should start thinking about now no matter what your current financial situation is.

In fact, financial difficulties are more likely to be the reason that you can’t afford not to get life insurance. As mentioned above, the debts that you’re struggling with will likely be even more of a hardship for the people you leave behind, especially if your partner will be responsible for making money and taking care of your children.

If you can afford Netflix, you can afford life insurance.

Bestow offers example prices for younger clients, including a two-year plan with $250,000 coverage and a monthly premium of just $10 for a healthy 23-year-old male (price quoted as of 7/22/19). The cost of life insurance is comparable with or even less than everyday things like one coffee per week or subscriptions to Netflix or Spotify.

With reliable protection available at such a low cost, life insurance is a smart investment. Bestow’s two-year policy is a great way to start if you’re interested in life insurance but not yet sure of your long-term needs, giving you time to discuss your situation with a financial advisor and find the perfect policy.

6. Life Insurance Can Protect Your Business

Life Insurance Can Protect Your Business

Just as families often face financial difficulties when a loved one dies, small businesses can fall apart when their owner is no longer there to provide direction. Entrepreneurs can depend on life insurance for the funding necessary to keep their company alive even after they’re gone.

Without life insurance, the death of an entrepreneur puts a lot of pressure on families and investors. Furthermore, there may not be a clear candidate to take over the main role. If you’re considering acquiring life insurance to protect your business interests, you may benefit from speaking to a financial advisor about the right policy for you. Protecting businesses is one of the most common reasons why millennials need life insurance.

Life insurance funds can be used to cover business debts just as they’re often applied to student loans, and these can be equally tough for your family to pay off. Entrepreneurs should strongly consider a life insurance plan with enough coverage to ensure that their business and family can succeed without them.

People in business partnerships should also consider taking out a life insurance plan on their partner. If one of you dies, the other will have the money they need to purchase the remaining shares and keep the business running.

7. Term Life Insurance Is a Great Value

Term Life Insurance Is a Great Value

Permanent life insurance offers a number of important advantages compared to term policies. That said, term life insurance is worth a consideration, as it may be what’s best for you.

Pick the term that’s right for you.

If you’re currently 25, for example, a 20-year term life insurance plan will provide coverage until you’re 45. By that time, your finances could be much more comfortable, and it will be time to re-evaluate if you still need life insurance

While a permanent life insurance plan would remain active, keep in mind that it may also come with a significantly higher premium.

People struggling to pay off student loans, for example, may only need life insurance for as long as it takes them to become debt-free. Similarly, parents with young children might look for a term life insurance plan that expires after their kids are financially independent.

Two-year, ten-year, and twenty-year terms are available.

Term life insurance allows you to acquire coverage for the time you need it without paying extra for the time you don’t.

If term life insurance is what’s best for you, Bestow offers flexible two, ten-, and twenty-year term life insurance plans to get you through these financially vulnerable years. If approved, you can lock in an affordable rate now and protect your family from student loans or other forms of debt.

8. Death-Related Expenses Can Be Costly

Death-Related Expenses Can Be Costly

Your family will appreciate having the payout from your life insurance plan to help them manage any financial difficulties, and death-related costs are near the top of the list.

Dying is expensive.

The average traditional funeral service costs between $8,000 and $10,000.

And medical expenses before your death can also be a significant hardship. The United States has the most expensive health care among developed countries. Your family could realistically face tens of thousands of dollars in debt immediately following your death.

Estate taxes are another concern for those with substantial assets. Many people use life insurance as part of their estate planning. Keep in mind that the payout itself can be subject to estate tax if the estate is listed as the policy beneficiary or you are listed as the policy owner.

It’s about your loved ones’ security.

Life insurance is a smart way to secure your family’s financial future. It’s just as important in your 20s and 30s as it will be later in life. Younger people typically pay less for the same coverage and often need protection more than older people.

Getting a life insurance plan is especially important if you have children or are facing any major debts. These are just a few of the key reasons why millennials need life insurance — it’s easy to get coverage in just a few clicks, so check out the Bestow website to apply now.

9. Permanent Life Insurance Allows You to Save

Permanent Life Insurance Allows You to Save

Life insurance policies are available both for a set period of time and for your entire life. Term life insurance coverage only lasts for the length of the policy.

Permanent plans usually come wither higher premiums, but they also offer a number of benefits. The value of your policy potentially increases tax-free as you make payments. You can withdraw some of that fund later in life if you need extra money. Combining life insurance and the potential for cash value in one policy achieves two financial goals at the same time.

That said, our research indicates that permanent life insurance really only makes sense for a small percentage of millennials. Most people will get a better deal through a term life insurance policy through a company like Bestow and investing the difference. Speak to a financial advisor if you currently have a life insurance policy and you’re not sure which is the right insurance vehicle for your needs.

Disclosure: This post was made in paid partnership with Bestow. Neither Bestow nor North American Company for Life and Health Insurance were involved in the preparation of the information in this article. The opinions and ideas expressed in the article are those of the author(s) and are not promoted or endorsed by Bestow or North American. You should always seek professional advice before making a financial decision. Money Done Right will not be compensated for life insurance purchases but may receive affiliate fees.


Logan Allec, CPA

Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

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