The Best Life Insurance Options for Millennials

Millennials today have been dubbed the most at-risk generation when it comes to life insurance as only 10 percent claim to hold adequate life insurance coverage. Many millennials have not already obtained life insurance because they often think it’s too expensive and that they don’t need it. In addition to this, many people (not just millennials) feel as if they don’t know where to start. With an endless supply and bombardment of information at our fingertips, it can be exhausting to filter through the many life insurance companies and financial tips when buying a policy. To make things easier, here are a few things millennials should know as they consider life insurance and choose the best company for their needs.

While “millennial” is often used by the older generation to refer to any kind of youth, the true age of millennials today ranges from mid 20s to nearly 40 years old, meaning that many of them have begun a new phase of life and have started families of their own. As you consider your situation, here are some reasons why it’s a good idea to consider purchasing life insurance now rather than later.

You may need it more than you think

Your specific situation will determine your need for life insurance. While many millennials have now started their own families or are heading that direction, others are still single. In general, if you have children or a spouse that would need financial assistance if something were to happen to you, it is a good idea to look into obtaining life insurance. In the case of the death of you or your spouse, life insurance provides the funds and financial security necessary for the surviving family to keep living comfortably or pay for other needed expenses like college, or medical bills. In addition, if you hold some kind of debt that is tied to or cosigned by someone else such as your parents or spouse, it may be beneficial to consider getting life insurance. This is also good advice for those who live in a state that holds the surviving spouse responsible for paying the debt of the deceased, even if their name is not attached to the debt. For millennials who are single, young, and do not have any family member depending on them, there is not an urgent need for life insurance.

You’re not getting any younger

To put it simply, when it comes to life insurance the younger you are, the better rates you will be eligible for. While factors other than age can also impact your monthly rate, young applicants have a much greater chance at obtaining low monthly premiums as the price increases rapidly with age. This is crucial because once you purchase a life insurance policy, you lock in the price of your monthly premium for the length of the set term. With this in mind, it is important for millennials to seriously consider whether they are wasting time in putting off getting life insurance, especially for those approaching 40.

Compare the estimated monthly premiums of a 20 year policy of health male applicants:

It doesn’t have to be expensive

In today’s unpredictable economy, money is often a primary concern for millennials and those who are unfamiliar with life insurance may be unwilling to make what they believe is a huge financial commitment. However, given the options available and your health and lifestyle factors, life insurance can easily be affordable.

When most people think of expensive life insurance policies, they may be thinking of permanent life insurance. Permanent insurance is a “whole life” policy that does not expire and has the benefit of building up real cash value from your monthly premiums that can even be taken out and used before death in some circumstances. While this type of life insurance has many advantages, it also can cost up to 10 times more than the alternative option of term insurance. With term life insurance, you select a set amount of time or “term” that the life insurance will be valid for, such as 5 to 20 years. In this way, you will pay monthly premiums for that specified term, which then expires upon term completion if the policy holder is living. When this happens, the money is lost, and you can consider purchasing another term policy if it is necessary. Additionally, you can also obtain a policy for a specific payout amount in the case of death. Both the term length and the policy amount will affect your life insurance rate, but for many of these options, the price is still more affordable than many expect.

Estimated monthly premiums for a healthy 30 year old male:

Estimated monthly premiums for a healthy 30 year old female:

Finally, individuals who are in good health and do not participate in any dangerous activities or jobs have a significantly higher chance of paying lower monthly premiums. If there are any changes you can make to your lifestyle, such as getting into shape or quitting smoking, it is in your best interest to make some adjustments, not only for your overall physical wellbeing, but your financial wellbeing with life insurance.

What to Consider When Choosing a Company

Since millennials are on the younger end of life insurance applicants, low rates are likely going to be easy to find and qualify for. However, you will want to also consider other factors as you research life insurance companies. For example, if you have certain preexisting health conditions or work a dangerous job, you will want to look at coverage for these specific issues as some companies won’t insure someone with certain conditions. In addition, many millennials prefer access services and interact with companies online, therefore, making sure an insurance company is online friendly will make your experience as comfortable and efficient as possible.

How much insurance you need

One mistake that many people make when buying life insurance is that they purchase a plan with too little value. When you think about how much life insurance you need, consider your current salary and way of life now, and estimate how much money your loved ones would need to live comfortably and pay their expenses in the case of your death. Additionally, if you are on the fence, it is a good idea to go with a higher value policy instead of a lower one to allow your loved ones to be as prepared as possible for the future, no matter what happens.

No exam life insurance

With the continuing threat of COVID-19, many do not want to face any potential health risks if they can be avoided, especially those who may be immuno-compromised or share a household with someone who is. Thankfully, life insurance policies that do not require in-person medical exams are becoming more popular. For these no exam policies, you will still be asked an extensive questionnaire about your health and lifestyle but instead from the comfort of your home, without the need for a physical test or blood work. This is especially beneficial for those who have preexisting conditions that may cause them to be rejected for a policy after the medical exam. Additionally, you can receive your results and eligibility for life insurance policies instantaneously instead of having to wait for your medical exam information to be processed. This type of policy, however, does come with more restrictions and also tends to be a little more expensive than your average term policies with medical exams and often limits the amount of coverage for your policy. Nevertheless, for those who cannot, or do not want to put themselves in the situation of getting a medical exam, these insurance options are a great alternative.

Best life insurance companies for millennials

Since millennials are on the younger end of life insurance applicants, low rates are likely going to be easy to find and qualify for. However, you will want to also consider other factors you are looking for that these life insurance companies may or may not have, such as no exam policies or quick and accessible online services. As you do your research, here are some companies to consider:

American General Life Insurance (AIG)

AIG’s main advantage comes in its wide variety of permanent and term policies offered in addition to no exam policies, with options to even specify a term to the exact year you want instead of 5 or 10 year increments. They are also well known for their quality and ease of use as they are easily accessible online, except for cancellation services which must be done over the phone. Additionally, while this company consistently receives high ratings, those who have genetic predispositions to certain conditions will receive poor coverage.

Mutual of Omaha

Mutual of Omaha is a highly rated company nationwide. They are especially good for families and provide great coverage for a multitude of complex issues. They offer a variety of term and permanent life insurance policies that you can customize to your needs, and they also provide options that do not require a medical exam. Their application process tends to be slower and most of their services cannot be accessed online.

Protective Life

Protective life insurance has been around for over 100 years and provides some of the most affordable rates among life insurance companies. Many preexisting conditions are covered under Protective, however, smokers and those with health issues outside of the company’s underwriting may be required to pay much higher premiums or find it difficult to qualify for insurance. They offer a whole life insurance and a variety of term policies but lack a no exam option.

Lincoln Financial

Founded by Abraham Lincoln’s son, this company strives for customer satisfaction through providing policies with excellent coverage for those with preexisting conditions and coming from diverse backgrounds. While much of the process is done by paper forms, they also include options that do not include a medical exam and have a reimbursement policy for data breaches and other cyber issues.

Pacific Life

Pacific Life is unique in that they don’t only sell life insurance, but they also offer certain funds such as pensions, annuities, and more to their customers. With a focus on dependability and inclusion, they offer flexible plans and affordable group rates. Although their coverage for preexisting conditions or lifestyle choices may be lower than that of other companies, they do provide policies that do not require a medical exam. Finally, though this company reaches a wide range of demographics, they have not yet fully integrated to an online format.

Haven Life

As a recently founded company, Haven Life has proven to be a reliable company ideal for young families and professionals. It’s streamlined application process focuses on simplicity and accessibility by providing quick results and an easy to understand interface. Haven Life does provide no exam insurance, and only provides term insurance while offering policies with coverage up to $3,000,000 for individuals of excellent health and qualifications.

Principal

Principal is a company with a foundation of frugal practices that have built up a strong reputation over many years, with their financial advantage also reflected in their status as a mutual life insurance company owned entirely by policyholders. They offer competitive policies as well as no exam policies even up to $1,000,000. Although having excellent customer service, some processing may be done by mail instead of online.

Prudential

Prudential offers a wide variety of life insurance and related services, offering a multitude of options for term with no exam options as well. They also offer extensive coverage and underwriting for individuals with complicated medical conditions or histories, although not all conditions fall within this coverage. Additionally, reviewing or cancelling your policy is done by mail instead of online, which can result in some inconvenience.

Where to Start

If you are a millennial, you don’t have to be intimidated by the process of life insurance or waste time assuming you don’t have a need for it. As you move forward in life, take the next step to financially prepare for the future with life insurance and rest in the security of knowing that your loved ones will be taken care of after you are gone. At LifeQuote, we offer life insurance policies as well as no exam policies and will help you find one suited to your needs from reputable companies. Make your financial security a priority and get a free instant quote from us today.