If you are in your twenties or thirties, your priorities are focused on building your career, paying your bills, and enjoying life. Soon you will want to start a family, own a home, and meet other personal goals. What a lot of people your age have not thought about is what happens to you if things go wrong. According to AARP, up to 50% of those who reach age 65 will require long-term care. Financial experts tell their clients to prepare to live over 100 years. With help from a wealth management expert, you can start securing your financial future now.
A life insurance policy is an agreement between you and the insurance company. If something unforeseen happens to you, like death or critical illness, the company will financially payout your agreed upon coverage. The person you name as your beneficiary will have this money to take care of your final expenses without damaging their own assets. Whatever assets are not used for your long-term care or funeral, your beneficiary can use for their own purposes.
For example, if you have a $250,000 policy and your funeral expenses only add up to $50,000, then your beneficiary will have $200,000 for their own use. This money could be used for your children’s future college expenses or other big expenses in their life.
Some policies can build a cash value savings account. Think of this as a savings account you can borrow against if something unexpected happens to you. Insurance companies can use this money within your policy to invest in the financial market to build value. While you are only paying a small amount each month, your cash value investments can be building up. At one point, you could even change your policy to a larger payout amount. The important thing to remember is that you can start building this policy to give you the best chance of a financially sound future decades from now.
The downside for people who wait to start a life insurance policy is that the older you get, the more your monthly payment (premium) can be. Theresa Rowden from Genesage says that you can get affordable life insurance even if you are in your thirties, and especially if you are in good health and do not smoke. At your age, you could get an insurance monthly payment less than $50. Once you reach your forties and fifties, that same policy could have a monthly payment of over $100. Another downside is that you have missed all those years of your life insurance policy building up your savings.
You might be thinking to yourself that you are covered with your employer. You are investing in your company’s 401k retirement plan and their life insurance plan.
The reality of today’s world is that you can expect to change jobs at least 5-7 times in your working career. The job you have 20 years from now may not even exist today. The days of working for one company for 30 years are rare. When you leave that employer, you will lose your benefits as well. You can change your 401k to your new employer or an IRA, but all of that life insurance coverage you paid for is gone.
Most of the time, the only way you can lose your personal life insurance coverage is if you stop paying your monthly premium. If you have a whole life policy that has a savings plan with it, you can use that saved cash to cover your monthly premium while you are searching for your next job. Even if you lose your job, your coverage can stay with you.
PLAN FOR YOUR FUTURE
There are many ways you can plan for your financial future. With the stability of Social Security Retirement in question, taking steps now can secure your own future needs. If you don’t know where to begin, you can speak with experienced agents. They can evaluate where you are financially and help you find those investment products that match your goals. As your goals change, your life insurance agent can assist you with realigning your new goals. Life is full of unexpected events that can change everything. Starting your life insurance policy now can lock in your monthly payment as you continue with your career.
To read more on topics like this, check out the lifestyle category.