Most millennials these days have a laundry list of financial responsibilities. Between paying off crushing student debt, saving for retirement, and figuring out how we can still be able to afford a house in a market that seems to get more expensive by the day, we often don't have the resources to pay for anything else. But there's one important thing that we're not paying attention to - that we definitely should be: life insurance.
Many millennials often put life insurance on the back burner because we think we're too young to need it. Some of us may think it's unnecessary at this stage in our life, others believe it's too expensive, and the rest see insurance as something you only need to purchase when you have a family. Many of us just find it too complicated to understand. In fact, only half (53%, according to TD Insurance) even have it, the lowest of all generations. One-quarter of us (28%) don't even know what kind of insurance we have.
As a young adult, you should consider buying life insurance sooner than later. Premiums are based on a number of factors, with age and overall health being two of the most important. The younger and healthier you are, the less you'll pay for coverage - especially if you don't smoke or have any pre-existing health conditions. If you want until your forties to get life insurance, you might see the monthly cost jump up significantly.
It may seem overwhelming but start by just researching your options. Don't know a thing about life insurance? Don't worry, according to the TD survey, half of all Canadian millennials are in the same boat as you.
The most common type of life insurance for millennials is called term, which locks you in at a fixed rate for a period of time (like 10 or 20 years). The rates won’t change until your term is up for renewal, and it can actually be relatively affordable. If you don't know where to start, check out the TD Right Fit Coverage Assessment tool, which will help you determine what coverage best fits your needs.
Not married? Don't have any kids? It doesn’t matter! Life insurance can be used by other family members, too. For example, if your parents are co-signers on any loans you have (like a car loan), as beneficiaries of a term life policy they could actually use those proceeds to help pay off the balance should something happen to you. And if you're planning to get married and have children in the next few years, you may want to lock in your rates now.
Beyond debt, life insurance can help cover things you may never have thought of, like funeral expenses or miscellaneous charges. Even if you have employer-provided life insurance, it might not be enough to fully cover all your financial obligations, so it’s a good idea to review the policy and look into a separate one to make sure your family has enough coverage.
And applying really doesn't take as long you think. 40% of Canadian millennials say life insurance is too complicated to understand, but in reality, applying can take as little as 10 minutes. That's less time than it takes to grab a coffee!