Young parents need to adopt a “protection first” mentality when planning for their family’s financial future, a New York Life executive said.
A New York Life survey found that 72 percent of parents identify debt reduction as a top financial priority for 2019. That number is even higher for millennial parents (ages 18-34), with 80 percent planning to focus on debt reduction this year.
Although debt reduction is a worthwhile financial goal, without the proper financial protection in place, “nothing else really matters,” said Brian Madgett, vice president, New York Life.
“What I mean by protection first is, whenever people put together any type of plan, they need to protect what matters most, which means protecting their income, protecting what they own, protecting what they owe, and really protecting those they love,” he said.
Madgett presented a hypothetical situation in which a family has young children and $30,000 in credit card debt that the parents are focused on paying off. “That’s fine, but if you’re just focused on paying off that debt, and the unthinkable happens and the breadwinner doesn’t come home, not only do the surviving spouse and children still have that debt but now the income goes away and all their financial security goes away.”
So why aren’t millennial parents buying life insurance? Madgett said he believes many are scared away from buying coverage because they think they can’t afford it.
“I don’t see young families saying they don’t want to buy life insurance,” he said. “But we keep hearing that it’s all about how families prioritize their cash flow. For many of them, they think this protection is more expensive than what it really is. But they could buy a life insurance policy for the equivalent of one cup of coffee a week.”
The message for advisors who are serving this market segment is simple, Madgett said.
“If insurance is in place, if something happens, the survivors are taken care of,” he said. “What we recommend to prospects is, just set goals. Meet with a professional, set goals, figure out what’s best for your family, and then take action.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her atSusan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.
© Entire contents copyright 2019 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.