While 85% of individuals feel that life insurance is essential to have, only 62% of people report actually having any.
For millennials, Time reports that the new generation of adults has prioritized other ways to spend money. In fact, a recent survey reveals that 29% of millennials said that they would rather lay out cash for a vacation than life insurance, and 60% said that it was more important to pay for everyday expenses, such as Internet and cell phones.
But while millennials’ statistics may reflect a flippancy towards life insurance, it may be time for them to start thinking about it, particularly for millennials with children or existing debt from student loans.
Many do not want to think about the death of themselves or a loved one, but proper precautions can be extremely beneficial in the long run.
“Young people think life insurance is something you need to think about when you get old,” certified financial planner Shannah Compton Game told Time. “Life insurance provides income replacement that can be valuable for young people who are just starting out, or in the situation where one spouse makes more than another”.
So what’s stopping millennials from making such an important life investment? According to Time, it boils down to two issues: convenience and financial misconception.
Additionally, millennials are a digital generation with little patience for red tape and procedure.
Time writes, “Most traditional life insurance policies require a medical examination and meeting with a sales person, processes that do not appeal to millennials used to making a transaction with a few clicks on their smartphones”.
Additionally, many millennials (and older generations alike) overestimate or misjudge the cost of life insurance; approximately 80% of consumers misjudge the price of life insurance, when in reality, it can cost as little as $160 for an annual rate.