Financial stability is one of the things that many people want to achieve but unfortunately have no idea how it’s done. To put it simply, security in your finances is the ability to take care of current expenses without the need to borrow, as well as the capacity to think forward and prepare for future spending.
It can be achieved by living below your means, saving up, investing, setting a budget, and growing your overall income. However, achieving financial freedom is easier said than done nowadays, especially with the array of things that can be bought, like the newest smartphones, laptops, gadgets, and wearable devices. Some people are easily swayed by trends and spend their hard-earned cash on travel.
Nevertheless, if you are serious about your finances, you will not live beyond your means and instead start saving up for the future. One way to do this is through an insurance policy.
The Wonders of Life Insurance
Acquiring life insurance is among the most important financial decisions you can make. Experts claim that getting life insurance is the smartest way to invest because it allows you to prepare for the future in case something happens to you.
For instance, if you’re the breadwinner and something happens to you, your family will have no choice but to suffer the consequences of not being financially prepared. Unpaid loans may haunt them, and the kids’ education may be affected because no one would support them anymore.
Most people fail to consider the potential costs that a grieving family needs to cover once a family member passes away. But, that’s where an insurance company comes in—it can take the place of the deceased loved one in supporting the needs of the surviving family.
Life insurance can save the bereaved members of the family from some, if not all, end-of-life expenses, including funeral costs and debts left by the deceased. Second, it takes care of their financial needs and aids them in their struggle. Finally, an insurance policy can provide peace of mind not just for the insured but also for the beneficiaries in case something happens.
So When is the Right Time?
Now that you’re aware of how life insurance can help you reach financial freedom and stability, the next question is when to purchase it. Here are some factors you may consider that would help you decide when it is time:
1. You are Below 35 Years Old
Insurance policy premiums are computed based on several factors like medical history, monthly income, and the amount you can pay monthly. As a rule of thumb, the younger the insured is, the lower the premiums will be. Some parents take insurance policies for their children as soon as they are born.
As a person ages, the amount required to get a policy also increases, given that the candidate is not suffering from any life-threatening conditions. Once he/she reaches 40, that’s when he/she is likely to begin suffering from illnesses and take medication.
During this period, any insurer would label that person as high-risk, and present an insurance policy with higher premiums to compensate for the risk. Worse is that he may be denied any plans at all. That is why it’s better to get one before you reach 35 years old.
2. Somebody is Relying on Your Income
Whether it is a spouse or children, your dependents would not be able to pay the bills, go to school, or spend anything on necessities in the unfortunate event that you pass away due to an illness or incident.
It is important to note that the amount your family may receive after you’re gone depends on when you got the insurance policy. As you continue to delay your decision, the amount your family would receive also decreases steadily.
3. Do Not Delay
Most people delay getting life insurance, believing that they don’t need it yet. It may be because people would only need it once an earning member of the family dies. The problem is that you’ll have a hard time applying for it once you have an illness.
Life insurance is a preparation for the future so that it can cover the expenses and support the surviving family members of a departed spouse and parent.
You should consider getting life insurance as a financial milestone in your 30s because most people in their 20s can’t afford it yet, while those in their 40s are already at risk of illnesses that may push premiums up.
You just need to pick a trusted insurance provider that will provide flexible benefits to your dependents. Under these insurers, you may pattern your policy to cover various expenses. Different expenses covered by life insurance include funeral fees, credit card debts, paying off the house mortgage, or even a family vacation.
