If You’re Young, Do You Need Life Insurance?

While the life insurance industry would likely say that everyone should protect themselves (or rather their family’s wallets) with life insurance, there’s a school of thought gaining momentum in financial circles that Americans 40-and-under (and without children) don’t really need it after all. After all, the risk of death is low for those under 40, and if you don’t have a family to provide for, why spend money on something you probably won’t need – especially in this downbeat economy?

“Generation Y” seems to agree. Right now, Americans young and old are avoiding life insurance – probably as a result of lower incomes and higher debt accrued during the recent Great Recession. According to an August, 2010 study from LIMRA, ownership of life insurance in the U.S. is at a 50-year low. Only 44% of Americans have life insurance right now, and 11 million households with children under 18 – parents right around that “40-and-under” benchmark – have no insurance at all.

In addition, the insurance industry isn’t exactly falling over itself to aggressively court younger Americans. A 2009 study from Agent Media says that exactly 0% of insurance sales professionals are primarily selling life insurance to 20-something consumers.

But is avoiding life insurance a bad move for younger Americans? Accidents and illnesses do happen, and financial disaster may well await families who lose their primary breadwinner and have no life insurance, but how do you know what financial effects your untimely passing might have on your family?

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