Please note this post has been brought to you in partnership with TD, all thoughts and opinions are my own.

Young people aren’t exactly known for paying a lot of attention to their own mortality, and it isn’t a ton of fun to consider a tragic event taking place.  Given those realities, it will likely come as no surprise that in a recent TD survey it was revealed that 55% of Millennials have no life insurance of any kind – and that it was ranked last overall on our personal finance priority lists!

With more and more Millennials hitting the “adulting” stage of life where they begin to acquire serious assets, get married, and have children, this study was fairly concerning to me.  I realize that while insuring yourself against unforeseen events will likely never be as sexy a topic as how to triple your money through the latest investing fad, it is absolutely critical to making sure  your loved ones are not left financially vulnerable in a worst-case scenario.

What Exactly is Life Insurance For Anyway?

TD’s life insurance survey also illustrated just how pervasive certain myths about the product are.  For example, 68% of participants thought that life insurance was best to cover one-time costs such as funerals.  While funerals are obviously one expense that life insurance could help with, they are by no means the most important or primary consideration.  From a purely financial perspective, the largest asset most Millennials have (as young people) is their future earning potential.  Your family is likely depending on your earning potential over the next 5+ decades to live the lifestyle they want and are accustomed to.  You need to protect against that loss to some degree – especially if you have young children, and there are many years of childcare costs left to consider (not to mention possible post-secondary education help).TD Insurance

Another way that life insurance helps to make your young family unit much more financially secure is through the relieving of debts in the event a tragedy were to occur.  No one wants to leave behind a massive mortgage that their family can’t afford without them, let alone student loans, and consumer debt.  Having the right life insurance means making sure that these liabilities are sufficiently taken care of, as well as helping your loved ones as they transition through a difficult time in their lives.

What Kind Do I Get and How Much Does It Cost?

There are too many different types of life insurance to discuss them all fully in this article, but suffice it to say that it can be difficult to determine just what protection you need for your personal situation.  That’s why TD created an online resource called the Right Fit Coverage Assessment Tool – which is an online resource developed to help Canadians choose the insurance coverage that best fits their unique situation. If you prefer a one-on-one meeting, you can also speak to an insurance advisor.

While life insurance obviously isn’t free, if you begin purchasing it when you are relatively young, it can help manage the costs over the long term.  If you purchase a 10-year policy, the cost of your policy will likely be less than a cup of coffee a day (and that’s not comparing to some ridiculous fancy frou frou concoction either).  TD also allows you to cancel or reduce your life insurance at any time.  If you change your mind after thinking about what type life insurance need (any time during the first 30 days) TD will refund your initial payment as well.

What Can You Afford?

If you’re a young person with no debt and aren’t financially responsible for any family members, then perhaps your life insurance needs are fairly minimal (maybe it is only a funeral that needs to be considered).  However, if you have a young family and/or a large mortgage, then you are statistically likely to be at the most financially vulnerable point in your life.  TD found that 55% of survey respondents didn’t have life insurance because it was too expensive.  To me, the question isn’t “can you afford the relatively small cost of policy premiums that most Millennials would incur”, it’s “can you really afford not to protect your family against a financial collapse during a possible time when they would already be dealing with so much”?

As a quick note, if you need more motivation to do all that healthy living stuff that we know is good for us but have a hard time committing to – here’s another reason: you’ll save money on life insurance.  By cutting out smoking and excessive drinking, eating right, and maintaining a healthy body composition, you severely lower the risk of a life insurance company needing to pay out your policy – thus you don’t have to pay nearly as much in order to disaster-proof your life!

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