It’s the internet age, and life insurance is not exactly rocket science.
But before we veer off, deep into the purpose of this piece; best life insurance companies for young adults, let’s give life insurance a little explanation.
Insurance is a risk-spreading mechanism that involves both the insurer and the assured. The insurer is usually a registered and regulated company.
Life Insurance is a contractual agreement whereby a party protects an individual against loss by the death of another individual. A Life insurance contract ensures the insurer (the insurance company) for a stipulated amount, agrees to pay a particular sum of money if an individual dies within the time limit of the policy. Receiving the said payment depends upon the loss of life of the other person.
In return for this protection or coverage, the assured/policyholder pays a premium for an agreed time range/period (the type of insurance policies varies).
Life Insurance is not a contract of indemnity. Why it isn’t considered a contract of indemnity rests on the fact that the person’s life can’t be measured in a pecuniary manner. It’s impossible to put a price tag on someone’s life. The measure of indemnity becomes whatever is fixed in the insurance policy.
However, an exact pecuniary measurement is possible if a creditor insures the life of a debtor. This is a different situation as the interest of the insured creditor is measurable because it is based on the value of the indebtedness.
Asides the case of deaths, Life insurance policies are generally marketed to tend to savings and investment, and retirement planning. An annuity is a typical example of a type of life insurance, seen as a long-term investment’designed to provide an income during your retirement years.
Why Buying Life Insurance Young is an Advantage
Age is just a number they say.
But when it comes to insurance, age is a number to be used to your advantage.
Buying a life insurance policy as a young adult can play to your advantage in several ways.
And yes, we understand that as a young adult, you have a to-do-list and buying life insurance sits at the bottom (if it is even on the list). But imagine the feeling of joy and assurance you will feel, knowing your loved ones are protected from unforeseen circumstances you probably aren’t thinking of right now.
Generally, Life insurance is less expensive for younger and healthier adults. It’s so cheap; it could cost less than a cup of coffee per day. Yes!!
The Best Life Insurance Policy for Adults
The best life insurance policy for young adults is a finicky subject. But we are advocates of individualism, and we believe that the best life insurance policy for you depends on your life insurance goals.
Let’s take a closer look at two popular coverage options:
- Term life
- Whole life
- Term Life
An easy way to view the term life insurance is to see it as a temporary coverage option. A term life insurance has a fixed premium for the time range agreed upon in the policy.
A term life coverage option is a good option for younger adults below the ages of 30. It is affordable with a lower premium. It is a great option especially for younger adults who do not have a lot of extra income. The Term Life policy provides the needed protection for a definite time range (number of years)
It is also considered a good option for younger adults with a young family as it offers protection for the children as they grow, giving you peace of mind on their future,
If the dreaded happens, the death benefits can be used as income for the young family, settle mortgage payments and for college tuition.
Also, term life policyholders can choose to convert their time policy coverage to a whole life option. Whole life insurance provides coverage for life.
2. Whole Life Coverage
Whole life insurance provides permanent coverage that ensures you are covered for life. The Whole life coverage usually carries higher premium amounts than term life insurance. The coverage is for life, so you don’t have to worry about fluctuating premiums as you get older over the years. The whole life insurance is a beautiful option for more stable young adults. You should consider getting the whole life coverage as you advance in your career and your salary increases.
One of the upsides of whole life policy is the way the premiums accumulate in cash value. The cash value grows on a tax-deferred basis, which allows your money to grow faster.
You can also borrow against the cash value for pressing financial needs like funding a business or purchasing a property (depending on the type of policy).
Why do Young Adults and Millennials Avoid Buying Life Insurance?
A staggering statistic reveals that 75% of young American adults don’t have life insurance. Why the risk?
Millennials don’t think life insurance matters. Some of the reasons why young adults avoid buying life insurance include:
1. Lack of Patience for the Process involved –
Many young adults are living their lives without life insurance for several reasons. Jason Veirs of Insurance Expert solutions, El Cajon, California reveals that many young adults believe they will be quizzed and asked a bunch of health questions that will make the process even more unbearing. “Many millennials also don’t want to be bugged by their pushy neighborhood life insurance agent, so they avoid speaking with one entirely,” Jason shares his insight.
2. An apparent False sense of security –
Studies reveal that millennials overestimate the cost of life insurance by 300% or more. They have a false sense of security and do not like to brood or think about the idea of mortality. The ascendancy of crowdfunding and fundraising initiatives like Gofundme.com, yourcaring.com has provided a sense of safety and security. Many young adults believe that they could harness or benefit from such systems in the event of a premature passing.
3. Student Loan Debt –
It is no news that student loans are on the rise. The millennial generation has more student loan debt than any generation in history. Matt Dubin of Matt Dubin consulting; a firm that provides managerial solutions for millennial employees opines that loan debt and the increased cost of living in Urban regions means that young adults get to prioritize their short-term expenses at the expense of buying life insurance.
4. Home Saving
Many Young Adults are saving for a home instead. Jordan Russel, a digital marketing analyst from Toronto, gives his two cents; “We millennials have more important things to focus on than life insurance, at our young age.” Home saving isn’t exactly an easy feat and, just like any type of insurance, life insurance is seen as a gamble by millennials. Jordan reveals that once he settles his 20% down payment for a home, he can focus on life insurance and other basic needs.
BEST LIFE INSURANCE COMPANIES FOR YOUNG ADULTS
- Banner Life Insurance
Banner Life Insurance is a reputable insurance company that has been operating since 1949. Banner life currently holds about $415 billion in premiums’ worth.
Banner Life offers both flexible and comprehensive coverage options. They offer special rates for the fitter and more health-conscious young adults. They also allow people up to the age of 95 to apply for a life term policy (which is uncommon in the insurance industry).
- MetLife Insurance
MetLife is also a strong and reputable insurance and financial service provider in the U.S and outside the U.S. They offer a range of policy options, including the standard term life and whole life coverage. They also offer survivorship plans, universal and variable plans.
MetLife offers a less complicated term life insurance package that does not require applicants to undergo a medical examination.
MetLife is a great choice for individuals with health-related issues that make a medically underwritten policy a tad too expensive.
- Mutual of Omaha
Mutual of Omaha has been providing stellar life insurance services for over a century. Mutual of Omaha offers a wide array of insurance products including universal life and accidental death.
Mutual of Omaha has also embraced an easy-to-follow online guide that aids customers ascertain the amount of coverage they need. The site also has a calculator to help you determine how long the life insurance proceeds may last.
Due to its industry strength and claims-paying history, Mutual of Omaha is rated highly on several “end of the year” rating agencies’ lists.
- Lincoln Financial Group
Lincoln Financial Group offers several coverage options including term and whole life, universal and variable. Lincoln operates a special option called combination life or long-term care. This option allows a policy holder to utilize the universal policy as an alternative to purchasing a separate long-term care insurance policy.
The Lincoln Life and Annuity Company is highly revered and has consistently scored high marks from rating agencies such as earned high marks from rating agencies such A.M. Best, Standard & Poor’s, Moody’s, and Fitch.
- Voya Financial
Formerly known as ING, Voya Financial is a behemoth in the financial and insurance service industry. Voya financial serves over 13 million clients in the United States alone.
Voya offers a wide array of coverage options, including term life, universal life, indexed universal life, variable universal life, and survivorship policies.
Voya financial is $519 billion strong in total assets under management. Voya financial is also considered a leader in retirement plan insurance services.
And those are my top picks for best life insurance companies for young adults.
NOTE: If you are seeking coverage, it is wise to obtain quotes from different insurance carriers. This will allow you to review various policies, as well as premium prices, and to determine the best plan that suits your requirements and needs.
Yes, life insurance as a young adult is going to be cheap, much cheaper than getting it later in life.
You can take full advantage of the competition and get an affordable life insurance policy. Your age might be a number, but it can determine how much you are going to pay for coverage. To put things in perspective, buying insurance at 25 is affordable than purchasing life insurance at age 55.
Oh, you work out and stay fit, but that does not stop you from aging and other health factors beyond the diameter of your weight plate.
The most significant factor that the life insurance company will be interested in is your health. They will look for existing conditions and evaluate your overall health to determine your level of risk.
If you have a medical condition or overweight, you will be considered high risk, and this will increase the amount you will pay for coverage. It’s important to Save up monthly premiums by improving your health before going for an evaluation.
But most importantly, you should get a life insurance policy now. Don’t wait up.
Written by Demi Oye