CHICAGO, July 05, 2022 (GLOBE NEWSWIRE) -- A recent LIMRA study found that almost half of millennials are now more likely to buy life insurance because of the pandemic. Their interest was higher than both Gen X individuals and baby boomers. Millennials are also changing the life insurance game by purchasing life insurance online. Some policy options that best match their needs include term life insurance. Here's what to know about how millennials are going about getting life insurance and what policies are best for them.
Purchasing life insurance online
Millennials have been accustomed to making many of their purchases online. The pandemic has only led them to make more online purchases. As a result, life insurance companies are setting up their digital platforms to make life insurance easier to research and purchase online. Millennials are able to get quotes from different companies without having to communicate with an agent. Once they've decided on a policy, in most cases, they can fill out an online application and potentially receive an approval within the same day. An insurer may offer a life insurance policy that doesn't require a medical examination, making for a quicker purchasing process. Term life insurance and whole life insurance are policy options that come with pros and cons for millennials to consider.
Term life insurance
Term life insurance is a policy that keeps an individual covered for a temporary time period. If the insured person dies within that period, a death benefit will be paid to the listed beneficiary. On average, a term life insurance policy is between 10 and 20 years. If an individual outlives their policy, no death benefit is paid out. Some insurers may offer the option to renew or convert the policy to a different plan. Premiums are typically low for young people, making it a more affordable option for millennials. The downsides of term life insurance are that the coverage is only temporary, and premiums go up every time a new term is taken out.
Whole life insurance
Whole life insurance is a policy that provides coverage for the duration of the policyholder's life as long as the premiums are paid. The policy can accumulate cash value over time that can be borrowed, partially withdrawn, or completely withdrawn upon surrender of the insurance policy. The premium price is locked in for the entire policy, which means it will not rise as an individual gets older. Many whole life insurance policies also don't require a medical exam.
The main benefits of a whole life insurance policy for millennials are that it never expires, builds cash value, and can earn dividends. The cash value growth and the growth through dividends are tax-deferred. It should be noted that whole life insurance can be more expensive than term life insurance. With the same death benefit, a whole life insurance policy can be five to 15 times more expensive than a term life insurance policy. Insurers will likely continue to evolve their policies to cater to millennials as they become more interested in life insurance.
The bottom line
One recent study found that millennials are the most likely to be influenced by the pandemic to purchase life insurance. Forty-five percent of millennials said they are more likely to buy life insurance due to COVID-19, compared with 15% of baby boomers and 31% of Gen Xers. Fidelity Life offers term life insurance policies either with a quote online or with the help of an agent, making it easier for people to get coverage.
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