Most 20 and 30 somethings may not think a lot about insurance. If you are young, healthy and low on savings, you may not feel that it is a priority, especially if you haven’t started a family. But, it could be important for you.
Today’s young adults don’t want to be sold any insurance products, they want to do the research and once they have found a suitable company to deal with that they trust, then they will engage in the sales process. That being said, insurance should not be “sold” in the first place. The need for insurance coverage is an educational process and based on each person’s individual needs.
Today’s millennials are extremely well connected and savvy with using social media, apps, and the internet. The internet is a great tool to do research and get a good understanding of a topic. But with anything, it needs to be used with caution. There is still a considerable amount of inaccurate information out there. This is where sitting down with a trusted professional will help sort through your final questions.
Most advisers have an online presence that is readily available for users to access. Look for someone that shows that they have value that is useful to you when solving your specific problems, someone who presents new ideas and new information. Look for someone who can help build knowledge, trust, dependability, and credibility.
So what should you look for in an adviser?
1) Someone who will help you understand what the right type of policy and coverage would be most beneficial to you in your own unique situation. Someone who can explain each in a way that is easy to understand without a lot of insurance jargon.
2) Someone who will break down all of the costs to you and break down the benefits that you will be receiving specifically.
3) An adviser who will communicate in ways that fit your lifestyle, whether that be through email, phone, text, skype, etc.
4) Someone who is knowledgeable of what types of insurance products others in your age group actually purchased, and their reasons for buying the coverage.
So why do millennials need life, disability, critical illness, health and dental coverage? Many of you have large student debts, plus may own vehicles, rental suites, credit card debt, etc. so initially you may need to consider income replacement products ahead of life insurance. Disability coverage is income replacement insurance that kicks in when you are unable to work. Critical illness provides a tax-free lump sum to spend how one sees fit.
I recommend that $1 million of cheap term life insurance is a good starting point, then you can decline the coverage offered by banks, car dealerships, credit cards, etc. It opens your future doors for insurance and it is coverage that you own, not the creditor.
Some companies now offer innovative products combing term life, disability and critical illness coverage, which may be convertible to a permanent option down the road if there have been no claims.
An important statistic to remember is that during your early working life, there’s a much greater risk of suffering a disability or critical illness than there is of dying. Additionally, all of these products are much cheaper when purchased when you are young and healthy.