If you're the parent of a young family, the coronavirus outbreak may have you thinking about your future and your children's future decades down the road. Current events have caused many of us to take stock of our personal health and finances, including our life insurance policies.

It's easy to avoid thinking long term when you have a long future in front of you, but securing life insurance as a young adult can protect your loved ones from taking on your debts, including student loan bills. Plus, policy rates go up as you age, so buying life insurance early will save you money in the long run. 

Remember, life insurance providers want information on your current state of health when offering a policy. Any cause of death brought on after the policy is established, including coronavirus, would be covered by life insurance. However, as the situation with coronavirus changes nationally, policy providers could pause new policies in high risk regions, which is a good reason to make sure you have the coverage you need now.

Your Life Insurance Policy Protects The People That Matter To You

It may be "your" life insurance policy, but the benefits of the policy will go to your family or whoever you selected as your beneficiary. Consider the financial impact that your passing could have on your spouse, children or other loved ones. How will they pay for your funeral arrangements, and what about any debts or taxes you are accountable for? 

Millennials may be particularly interested in how life insurance can impact student loan debt. Although federal student loans are discharged when the borrower dies, private student loans may still need to be paid off even if the borrower has passed on. That could leave your loved ones (including your parents if they cosigned a private loan) on the hook after you are gone.

"A life insurance policy can grant you and your loved ones peace of mind that these expenses will not make an already difficult situation worse," Dave Hodge, Vice President of Insurance at AAA of Western and Central New York, said. "Plus, you'll also be setting an example of personal accountability and responsibility for generations to follow."

Life Insurance Isn't That Expensive

Most people think life insurance is much more expensive than it actually is, according to a 2018 Insurance Barometer Study by Life Happens. The study asked how much a $250,000 20-year level term life insurance policy would be for a healthy 30-year-old. The median estimate was $500, which is more than three times the actual cost. The disparity was even worse for Millennials, with four in 10 assuming that life insurance costs five times what it actually does. 

"Millennials are particularly risk adverse," Hodge said. "It's important for them to know that they can save on a life insurance policy if they buy earlier in life."

Life Insurance Isn't An Investment. It's About Countering Risk

Younger generations may not have the correct mindset on the benefits of life insurance. The concept may seem similar to traditional investments like stocks, but life insurance is not an investment (although life insurance companies make their money by investing the premiums).

Life insurance is an agreement you make with the life insurance company. As a policy holder, your regular payments ensure your beneficiaries a sum of money if you die. 

There Will Never Be a 'Comfortable' Time to Talk About The End of Life

Not interested in arranging for your passing while you are still young? Just imagine how uncomfortable that discussion will be when you get older! The truth is, death is not a topic that is ever fun or easy to talk about, and it doesn't necessarily get easier the older we get.

"Making these types of arrangements isn't an easy topic to discuss, but getting the details settled now can prevent major expenses for your loved ones in the future," Hodge said.

If you have questions about life insurance, get advice from a financial professional at AAA. We can help you identify and meet your financial goals while helping you find a plan that fits your budget. Reach out to a Life Insurance agent at AAA today. 

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