Here's Why Millennials Should Consider Life Insurance

Many companies allocate significant resources to crafting attractive employee benefits packages. Among these offerings, life insurance remains a cornerstone benefit due to its promise of financial security for loved ones. However, a shift in workforce demographics has led younger employees, particularly millennials, to question its necessity.

A recent Princeton survey revealed that 65% of millennials do not have life insurance. Several factors contribute to this trend, including income constraints and evolving lifestyle priorities. Many millennials enter the workforce burdened with student loan debt, and many are postponing major life milestones such as marriage, parenthood, and homeownership.

Despite these trends, millennials are not entirely dismissing the importance of life insurance. They simply need to understand its value before committing. Here are key reasons why life insurance is a smart financial decision for millennials and why employers should emphasize its benefits.

The Benefits of Life Insurance for Millennials

1. Affordable Coverage: Locking in Lower Premiums Early

One of the most compelling reasons for millennials to consider life insurance is cost. Life insurance premiums increase with age, meaning younger, healthier individuals can secure lower rates for substantial coverage.

For example, a healthy 25-year-old can obtain a six-figure term life insurance policy for just a few hundred dollars per year. In contrast, that same coverage can cost thousands of dollars for an older adult. With many millennials now in their mid-30s, the window to secure the most affordable rates is narrowing.

2. Protection for Dependents and Future Planning

While some millennials are delaying marriage and parenthood, not all are opting out of these life events. Regardless of age, individuals with financial dependents should strongly consider life insurance.

Should an unexpected tragedy occur, a life insurance policy ensures that dependents, such as spouses, children, or aging parents, are financially supported. Without life insurance, surviving family members might struggle to cover basic living expenses or debt obligations.

3. Financial Security: Covering Outstanding Debts

Millennials face significant financial burdens, particularly student loan debt. In cases where parents have cosigned these loans, they may be held responsible for repayment should the borrower pass away. Similarly, newlyweds who share credit card debt, mortgages, or other financial obligations could be left solely responsible if their spouse dies unexpectedly.

Life insurance helps mitigate these risks by providing a financial cushion to cover outstanding debts. Additionally, the average funeral costs between $6,000 and $10,000, creating an additional financial strain on families. A well-structured policy can alleviate these costs and provide peace of mind.

Why Employers Should Promote Life Insurance to Millennials

Employers play a vital role in educating millennial employees on the importance of life insurance. Many millennials are willing to invest in financial security but need clear, compelling reasons to see its value. Here’s how employers can encourage participation:

• Highlight Cost Savings: Emphasize how purchasing life insurance at a young age locks in lower premiums for life.

• Address Debt Concerns: Show how life insurance protects cosigners and dependents from inheriting debt.

• Make It Easy: Offer affordable, employer-sponsored life insurance plans that simplify enrollment.

A Smart Investment in Financial Well-Being

Millennials may redefine traditional life paths, but financial security remains a universal priority. Life insurance provides a cost-effective way to protect loved ones, manage debt, and ensure long-term stability. By securing a policy early, millennials can take advantage of lower premiums and safeguard their financial future.

For employers, positioning life insurance as an essential component of a well-rounded benefits package can enhance employee retention and financial wellness. As millennials continue shaping the workforce, proactive discussions about life insurance will help ensure they make informed, future-focused decisions.

Contact the TPG Insurance Specialists at 909.466.7876 today for more guidance on life insurance and health and benefits.

Also, check out Mental Health Benefits in Healthcare Plans and Learn to Navigate the Various Employee Benefits Options on our blogs/resources page!