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While buying life insurance isn’t exactly a fun topic, approaching it from a positive point of view can make it a lot more pleasant to deal with. Life insurance can be a valuable and versatile tool for helping you ensure the future security of yourself and your loved ones. If you’ve been wondering if life insurance would be a good investment for your unique situation, read on for all the ways the right policy can help you achieve your personal and financial goals.
The good news is that you can most likely get more coverage for less money than you think. Recent research shows that half of adults in their 20s and 30s believe the estimated monthly premium for a $250,000 level-term life insurance policy, for a healthy 30-year-old, is $100 plus per month, when actually it’s closer to $13 per month. For this reason, many people delay buying life insurance until they have a health scare and end up paying a lot more than they would have if they'd applied earlier. Buying a life insurance policy when you're younger and healthier allows you to lock in lower premiums that can save you money in the long term. It can be helpful to know that you can always add additional coverage or change your coverage later on. Your life insurance policies can evolve as your life does.
How long have you been thinking about buying life insurance? Many people have purchasing a policy on their mental “to-do” list for years before they take the steps to purchase a policy, knowing in the back of their mind that if something was to happen their family would be at risk for financial hardship. Almost half of households surveyed said they would feel a financial impact within six months if their primary wage earner was to pass away and 28% would be in trouble within the first month. Buying a life insurance policy is the best way to “hope for the best, while also preparing for the worst.” Knowing you’ve done all you can to protect your family no matter what happens will reduce your stress and better allow you to enjoy the everyday moments of being together.
It's common to delay buying life insurance in order to focus on paying off current debts and building savings. While this strategy is understandable, it can also backfire in the event of your unexpected death. Unpaid debts such as mortgages and credit cards can become a huge burden to the family you leave behind, creating additional stress in an already difficult time. Buying enough life insurance to pay off your current debts—as well as protect your families current standard of living into the future—will help protect them from potential financial stress and hardships.
Many people delay buying life insurance in order to avoid the hassle of researching the multiple types of policies and sorting out which ones might be a good fit for them. This is understandable, as there’s a lot of information on different life insurance options, which can be overwhelming and confusing. Unfortunately this “analysis paralysis” can lead to delays that lead to regrets. Research shows up to 40% of people who eventually buy a policy wish they'd purchased their policies sooner. Visiting trusted internet sources, talking to your financial planner or other trusted, financially savvy people in your life and talking to a few licenced insurance agents are some of the ways to start the process. Stay motivated by focusing on the peace of mind you will feel when you know your loved ones are protected.
Having a life insurance policy through your employer can lull you into a false sense of financial security that allows you to justify not buying additional coverage. While a great additional benefit to have, group plans offered through employers generally only offer coverage of $25,000 to $50,000 or one or two years annual salary. These policies don’t offer nearly enough protection as most people will need at least 10 times their annual salary to begin to adequately protect the quality of life and futures of their families and loved ones. Also, work based insurance plans won’t travel with you if you were to change employers or begin working for yourself. In summary, work sponsored plans are a nice perk, but to fully protect your family additional coverage is usually needed.
It's common for stay-at-home parents and other people who contribute in nonfinancial ways to the wellbeing of their families to think they don’t need life insurance, but this isn't the case. Whether it's earned income, childcare, home management or caring for an elderly parent your unique contributions will be difficult and likely expensive to replace. Have you ever stopped to estimate how much it would cost for your spouse to pay someone to do all the things you do? An unexpected death can leave a care gap that will be very expensive to fill. Life insurance isn't just about replacing lost income, it's about helping to provide everything your family needs to thrive.
One of the primary reasons people put off buying life insurance is to avoid thinking about death. While this is a natural and understandable response, it can lead to procrastination that puts your family and loved ones at risk. Experts recommend creating a more positive framework by focusing on the hopes and dreams you have for the people most important to you instead. Envisioning all the positive outcomes you want for your loved ones—from college for your kids to a secure retirement for your spouse—can take the necessary steps to make sure they are taken care of no matter what.
Purchasing an individual life insurance policy will help protect the people you care about most, should the unexpected happen. Taking the steps to find the right policy for you can help you clarify what really matters and focus on taking charge of the legacy you want to leave behind—no matter what challenges life throws your way.
