If you have no debt, no one relying on your income and a life essentially free of encumbrances, you may be okay going without life insurance (for now). But for many people under 30 in the US, life isn’t that simple and you may need to rethink what happens financially in the unhappy event of your demise. Below are five situations to consider buying life insurance — even if you’re relatively young.
#1 If you have kids with or without marriage
Most Millennials are saying “I don’t” rather than “I do” when it comes to matrimony, but that doesn’t mean they’re off the baby train. According to research by ChildTrends.org, 41 percent of all US births are to unwed mothers. That number is closer to half when the mother’s is under 30. Many Millennials choose to cohabitate without matrimony as well. If you live with a partner or have a child with a partner with or without marriage, life insurance will protect their interests in case something happens to you.
#2 If you have co-signed debt
Of those age 30 and under, 42 percent live in a household with student debt. And a recent Wells Fargo survey found that 40 percent of Millennials self-describe as being “overwhelmed” by debt. If you have only Federal student loans and all your other debt (auto loan, credit cards, medical bills) are solely in your name and you’re unmarried, these debts will pass away if you pass away. But any co-signed debt will be inherited by your co-signer. Life insurance can keep this debt from burdening those that share in your debt.
#3 If you own a home
Now that the economy has recovered and rent is on the rise, more Millennials are opting into the housing market. In 2014, under 30s made up 32 percent of the housing market, up 4 percent from 2013 and are the largest age group of home buyers. Cities with strong job growth and high rents are seeing the greatest surge. If you’re a savvy young adult who owns a home, life insurance can ensure your equity is not lost and the property can be bequeathed. This is especially important if you cohabitate with a partner.
#4 If you have a high-risk lifestyle
If you’re under 30, your mortality is likely not on your mind. You don’t expect to die but, in your age group, the biggest cause of death is the unexpected. Unintentional injury is the leading cause of death for Americans under 30 and kills more than 180,000 each year. This includes car accidents, poisoning, falls, suffocation, fire and drowning. This is more of a concern if you engage in dicey hobbies or work in a high risk job such as a first responder or law enforcement. Life insurance makes sense in this case.
#5 If you have congenital or hereditary health risks
Most young people don’t have to worry about disease or poor health but, if you have have a congenital heart defect or a strong hereditary likelihood of developing cancer or another illness, you should know that you can be turned down for life insurance once you receive a formal diagnosis and/or develop symptoms. If you currently have a clean bill of health but know your odds of continued good health are slim, you may be able to lock in life insurance now and keep it even if a condition crops up.
The bottom line is that life insurance by age can be critical depending on your health, lifestyle, debt and, most importantly, if someone depends on you financially. Many employers offer free life insurance, in a modest amount and you can often buy up for a lower cost than purchasing independently. If you go this route, inquire about portability before you purchase so you can take it with you when or if you change jobs.
