When you're young, the thought of your own demise is probably the furthest thing from your mind. However, for a number of reasons that we're about to explore, life insurance for millennials could help your family cope financially if the unthinkable were to happen.
The good news is that in the UK, your next of kin would not automatically be responsible for your debts if you were to die. That being said, if you have taken out a joint loan or someone has provided a loan guarantee on your behalf, the surviving party usually becomes liable for the whole debt.
If you're a millennial with a degree, it's highly likely that you didn't have access to free university education and you may have racked up a considerable amount of student debt as a result. Outstanding student loans provided by the UK Government are usually written off after death. Private student loans secured using a guarantor, on the other hand, typically aren't, which will mean the co-signer for the loan is left to pick up the bill.
Due to rising costs, the average cost of a funeral in the UK reached nearly £4,000 in 2020 - a 1.4% increase on 2019. Sadly, being young does not make you indestructible and, if the worst were to happen, it could be your family who are left to pay the costs of your funeral.
According to the Royal London National Funeral Cost Index Report, 23% of people struggled to pay for a loved one's funeral in 2020 and had to borrow money from friends or family, and nearly one in ten (9%) had to take out a loan, or go into debt, to cover the cost.
Having a life insurance policy in your name will help reduce the funeral expenses for the family you leave behind, while ensuring you get the send-off you deserve, without leaving your family with financial hardship.
When you are young, you are far likelier to be medically fit. Unless you have a family history of illness, this means you will typically find it a lot easier to secure a life insurance policy. What's more, you are likely to find it a lot easier to include critical illness cover, which will pay a lump sum if you are later diagnosed with a medical condition covered under your policy.
Recent research suggests that, if the main breadwinner's income is lost, the average household can only survive for 24 days before running out of funds. For this reason, having critical illness cover in place offers a robust level of financial protection. So, if you were to become seriously ill, you would be able to concentrate on getting better, rather than having to race back to work to cover your mounting bills.
For more information about critical illness cover, click here.
As your age increases, so will the cost of buying life insurance. An additional benefit of being young and illness-free is that insurance providers will usually deem you as low risk in terms of paying out on the life insurance you take out. Consequently, locking into a policy while you are young and healthy will mean you pay lower monthly premiums for the entirety of its term.
One type of life cover purchased by young adults with no mortgage is level term life insurance. Essentially, level term life insurance is a policy that will pay out a fixed amount and lasts for a length of time of your choosing. And the younger and healthier you are when you purchase a policy of this type, the cheaper is it for the entire term - whether that's 10 years, 20 years, or more.
For more information about level term life insurance, click here now.
Note: it's always worth looking into all the different types of life insurance that are available, as choosing the right one for you will depend on your individual circumstances.
If someone close to you is likely to be affected by your death financially, it is worth considering life insurance, regardless of your age. Plus, if you purchase life cover now - rather than later - you are far more likely to secure a cheaper policy for the cover you require rather than waiting until you're older.
At Compare Cover, we're dedicated to helping people protect their world for less. As a specialist online comparison service, we are committed to ensuring you can find the best possible life cover at the right price.
Using our life insurance price comparison service is fast and incredibly easy. To quickly compare all your life insurance quotes in one simple search, click here now.
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