The Millennial's Need for Insurance
Do You need Life Insurance? YES ! Single or Married with or with out children; the answer is always yes !
Three scenarios for you here:
1) Single with no children. Your parents gave you life, you give them life insurance! You need enough life insurance to cover your funeral expenses and outstanding debts. Name your parents as beneficiary to your life insurance policy so they won’t be stuck with your funeral bill, car payment, rent lease, student loans and other debts when you die. This is the kindest, easiest way to say Thank You and attempt to ‘payback’ all they done and have given to you over course of your life.
2) Married. This is where it gets complex. Preserving two incomes, and care-giving/housekeeping services if stay at home spouse. Consider how it would affect your spouse financially if that second salary is suddenly lost or perhaps now you no longer have a caretaker for your ill elderly parent living with you. Once married you’ll need a much higher death benefit. Its crucial to factor in funeral expenses and outstanding debts, and be sure to cover your current budget and living expenses. It can be draining on a widow to have to deal with work, financial stress, paying taxes and outstanding debts. Communication is huge here, imagine how people are surprised with the amount of money they owe when their spouse dies, some of the debts hidden from the other. Don’t be one of those people. Ensure that you and your insured! It’s imperative to consider additional expenses your spouse may face if you were to die. Spouse may need to go back to school, to get a degree, or incur high medical expenses due to chronic depression and declining health. Crunch all these numbers, and you’ll come out with the minimum amount of life insurance coverage you need. To play it save it could be wise to add 10-15% as extra as a buffer.
3) Married with kids. You’ll need a lot more coverage. Let’s face it kids are expensive! Sometimes these costs continue even after they leave the nest. Expenses needed to be covered can include childcare, private school or college tuition, or any other of infinite of ways parents will do almost anything to help their children. Once you figure out the minimum amount of insurance be sure to add 15-20% extra as a buffer for protection.
Employer Life Insurance – Is it enough? = Probably not ! If your employer offers low-cost or free life insurance as a benefit, it’s an awesome perk, but to be honest it is probably not enough coverage. Most of this policies are twice your salary. Insurance polices are best at 7-10 times your annual salary minimum. You may be able to buy additional coverage at low rates through your employer-provided plan. If not, you may need to purchase a second policy. Additionally if you are to leave the employer or retire, you MUST covert your policy to a individual term policy until you get a new employer or a permanent policy until 100 if you are retiring.
If you want a second opinion check out the source article used for reference:
https://www.investopedia.com/articles/personal-finance/110415/millennials-guide-whats-right-life-insurance.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186