Did you know that more than 80% of Americans overestimate the cost of life insurance? There is an enormous lack of understanding around the true cost of life insurance. Many people evaluate the cost of insurance in a vacuum rather than taking a look at the bigger picture. Delaying the purchase, or not purchasing at all can have a greater impact on your wealth than you might think. Owning this valuable protection can have rippling effects on all aspects of your financial life. Let’s look at some of the benefits.
Life Insurance can help you to better enjoy your retirement.
After working your entire life to enjoy your retirement, you should be able to spend the money you’ve saved without worrying about how much money you will leave for your loved ones or charity. Owning life insurance in retirement can allow you to have different choices with regards to how you take income. By having a choice, you can take advantage of different tax strategies and distribution options. The result; life insurance ends up working as a turbocharger for all your other assets. This will allow you to spend and enjoy your wealth throughout all of life’s phases while having all that wealth recreated at your death. A true win-win!
It is full protection for your family in case tragedy strikes.
31% say they’d feel the financial impact from the death of the primary wage earner in 1 month. Income replacement not only takes care of providing a continuation of a current lifestyle for your family, but it also allows for your family to be in a position to take the time they need to grieve a loss rather than have to have the added pressures of figuring out how to pay bills. With the right life insurance policy, if tragedy strikes, your family will be taken care of. The policy can cover funeral costs, ongoing living expenses, outstanding debt, family businesses, your children’s education, and protect your spouse’s retirement fund.
Buying it at a younger age will give you more flexibility in the future.
Since no one has a crystal ball, make sure you secure your insurability by obtaining coverage at an early age. Then, if a health issue comes up, you already have secured the protection you need. You can start by purchasing term insurance. As you earn money and are building savings and growth, you can convert that term coverage to permanent insurance. By converting the coverage, you will put yourself in a better position in later years to have more options. In addition, building cash value inside of permanent life insurance gives you access to capital throughout your lifetime to avoid threats, take advantage of opportunities, and fulfill obligations.
It helps our economy.
Life insurance should replace your full economic life value. Replacing your true value replaces you in the workplace as well. There is an economic role that we all play in society, and when someone passes away that stops. Life insurance replaces that value in our society as a whole.
Stay at home partners need life insurance too.
If something were to happen to the stay at home partner, then all their contributions to the household will be gone or need to be replaced. The job of a stay at home parent has no price tag but life insurance will ease the burden of childcare and other household responsibilities.