News and Commentary

You Are Not Too Young To Think About Life Insurance by Scott Montgomery

Death is often the furthest thing on the minds of twenty-somethings who are just beginning their careers and enjoying the freedom and opportunities that come with their post-college life. However, introductions into adulthood also come with a long list of responsibilities, liabilities and risks that require carefully consideration and planning.

In the unfortunate and tragic event that a millennial with student debt or other loan obligations has an accident and passes away, the responsibility for making payments of those loans may fall the individual’s parents or other loan co-signers. While state law requires that the assets of a single individual without children pass to his or her parents, it is unlikely that a millennial’s savings will cover the outstanding loan balance. Rather than transferring this burden to one’s parents, consideration should be given for a life insurance policy that covers the amount of the debt.  Such a policy will likely cost less in premiums when an individual is young and healthy and can often be secured through an employer. Alternatively, parents of millennials may consider buying policies insuring their children, who may take over premium payment in the future when their earnings rise.

The importance of life insurance policies increases as individuals get married and start having children, whose long-term care and lifestyles often depend on a decedent’s income. For example, the proceeds from a life insurance policy may help surviving families make mortgage payments to stay in their homes, pay for a child’s college education or pay off burdensome debt. A life insurance policy may also be used to help with retirement or simply provide financial flexibility.

When a named beneficiary receives the proceeds from a life insurance policy, those proceeds are not subject to federal income taxes. However, it is possible for those proceeds to be subject to federal estate taxes when a decedent’s estate is valued above the lifetime exclusion amount of $11.4 million in 2019 ($22.8 million for married couples filing joint returns) or $11.58 million in 2020 ($23.16 million for married filing jointly). One way to avoid this scenario and exclude life insurance proceeds from one’s taxable estate is to structure a policy as part of an irrevocable life insurance trust, in which the trust owns the policy and makes premium payments on behalf of the insured for the benefit of a named beneficiary.

As individuals age, their life insurance needs may change. For example, the amount of a death benefit may be increased or decreased depending on one’s stage of life and his or her financial responsibilities to family members and even business partners and employees.

While life insurance may not be a top-priority for most millennials, it can be an important and often affordable component of a well-thought-out estate plan, which puts individuals in control of their finances during life and after death.

About the Author: Scott Montgomery is a director with Provenance Wealth Advisors, an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors and Accountants, and a registered representative with Raymond James Financial Services.  For more information, call (954) 712-8888 or email


Provenance Wealth Advisors (PWA), 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.


Scott Montgomery is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC.


Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.


This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James. You should discuss any tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.


Investments mentioned may not be suitable for all investors. The cost and availability of life insurance depend on factors such as age, health and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Guarantees are based on the claims paying ability of the insurance company.