Life insurance is an essential protection choice for many people, as it ensures your loved ones are financially supported when you’re no longer around.
Despite this, just 26% of British millennials have life insurance, with many seeing it as an expensive and complicated product that’s only for older people.
However, life insurance is an important consideration for every adult of every age, especially if you hold a joint mortgage with your partner.
604,707 people died in the UK in 2019, yet only 268,835 life insurance claims were filed. That means just over half of those who died didn’t make plans to protect their loved ones in the worst-case scenario.
Here are three reasons why millennials aren’t taking out life insurance – and why they’re wrong not to.
“You don’t need life insurance until you’re older”
The most common misconception for life insurance is that it’s a product only for older people. In reality, any adult can take out a life insurance policy.
If the worst unexpectedly happens, your family may suddenly find themselves unable to pay bills without your income. Life insurance can help you provide the financial support they need.
Life insurance can also be used to pay off a mortgage if you die before the end of the term. There are currently 1.5 million millennials who have joint mortgages but no life insurance. This means there are many people who would struggle to pay their mortgage or bills if something happened to their partner.
“Life insurance is complicated”
Many millennials don’t understand how life insurance products function.
In a study of 2,000 people aged 23 to 38 by Legal & General in 2018, 27% of uninsured respondents said they had no knowledge of how life insurance works.
However, life insurance is very simple and straightforward.
You pay monthly premiums based on your personal circumstances, such as age and health. If you die while your policy is active, your chosen beneficiary will receive a lump sum.
If you find the concept of life insurance complicated, please contact us at Edinburgh Mortgage Advice. We can help explain how life insurance works, and why you should protect yourself and your family.
“Life insurance is too expensive”
Legal & General also found that 92% of millennials greatly overestimated how much life insurance costs per month.
Survey respondents were asked to guess the average monthly cost of a life insurance policy for a 30-year-old non-smoker with a cash sum of £100,000 over a term of 30 years. The panel came up with a median guess of £23 a month.
The actual average monthly cost for that scenario is £7.27. That means millennials overestimated the cost by more than three times. For the cost of a couple of coffees each month, you could ensure that there was a lump sum in place to protect your family if the worst happened to you.
The costs your loved ones could face without life insurance are likely to significantly outweigh those of the premiums. Without it, you may be putting your partner in a position where they can’t afford to pay the bills or your mortgage if you’re no longer around.
Get in touch
At Edinburgh Mortgage Advice, we can recommend the right cover at the right cost for you. Email [email protected] or call 0131 339 2281 to speak to us.