Navigating Your Financial Foundation in an Inflation Nation

Navigating Your Financial Foundation in an Inflation Nation

Navigating Your Financial Foundation in an Inflation Nation

Just when you’ve reached a place in life where you need the big-ticket items the most – a bigger home for your growing family, furniture for that new house, a bigger, more practical car for your growing family—Inflation 2022 hits, and those things move farther away.

You’ve probably heard that the cost of inflation is the highest it’s been in 40 years. For many of us, it’s our first inflation experience. And if that’s the case, you’ve probably lived through two recessions and dealing with crippling student loan debt already.

How did we get here?

U.S. GDP dropped by 1.4% in 2022’s first quarter. And as you might imagine the Ukraine crisis and a rocky stock market haven’t helped.

Depending on who you ask, culprits include COVID stimulus check spending, post-COVID global supply chain disruptions, the Great Resignation, and whomever a politician on any day on any news channel happens to name in the legislative blame game.

Who’s suffering the most?

An April Wells Fargo study indicates that people between ages 25 and 44 experienced the highest inflation rates, at nearly 7%. The very demographics that require those big-ticket items the most. The youngest of which is making the least amount of money.

For those of us carrying student loan debt, despite government promises to cancel it, higher interest rates will affect federal college loans as we wait for that promise to become a reality.

How long can this go on?

Some experts say it may get better as soon as the end of this year. Others say it may last until 2025. The good news is that most of them see positive signs that at least the supply chain challenges may ease soon.

Deloitte recently offered four possible scenarios in an article positing inflation’s future. They predict the following:  1. we return to normal based on economic history  2. we accept a rate of up to 4% and adjust to the new normal  3. Rates rise to between 8 and 9%, which sets off a spiral that discourages future spending or 4. supply chains improve rapidly while demand drops, driving rates down to 1% or lower.

How likely is a recession?

Technically, a recession happens when GDP falls for two consecutive quarters. Economists are saying recession risk is rising to about 50%, although their predictions vary as to how bad it may be. And no one has declared us in an actual recession yet.

The economy is as hard to determine as a pair of grandmothers’ contentious debate over whether to wake a sleeping baby or let them lie.

The Congressional Budget Office is more optimistic. They predict that GDP may grow by 3.1% and that inflation has topped out and will only go down from here.

Given the ongoing debate, it’s best to prepare for the worst and hope for the best.

What Can I Do to Prepare?

The most important thing you can do is to create a budget and learn how to stick to it if you haven’t already. And make sure your budget reflects your actual spending.

Before you make any purchase, carefully consider whether what you plan to buy is a need or a want. If you’re used to buying on a whim, inflation is a great opportunity to acquire a long-term financial mindset by delaying your purchase if you can.

And refrain from listening to the tempting calls of the credit cards in your wallet. Remember, the fed raised interest rates. And, given we are living in uncertain times, you probably shouldn’t rack up credit card debt if you can help it. However, if you’re already carrying credit card debt, consider a balance transfer to a credit card with a 0% APR. They’re out there.

And if you have things in the needs column, buy big. If the baby formula crisis of 2022 has taught us anything it’s that buying in bulk is a smart move.

Yeah. It’s a stressful time. But remember, your grandparents got through miles-long gas lines in the 70s, your parents survived the Great Recession of 2009. And you’ll get through this. After all, two world wars built the Greatest Generation.

Also keep in mind that economies fluctuate. This too shall pass.

In the meantime, make time for Me Time. Go to the batting cage or the gym. Zen out with meditation and yoga. Insurance data shows that stressed-out people suffer health issues they can’t pay for and leave the planet sooner than they statistically should.

Another way to prepare for the worst is to have a solid life insurance policy with a locked-in rate. Get term life insurance policy quotes today.

Understanding No Exam Life Insurance

Understanding
No Exam
Life Insurance

Understanding No Exam Life Insurance

Getting an online term life insurance policy quote is the easy part. Actually receiving the policy can take longer and is a bit more complicated. The culprit? Medical underwriting.

However, if you’re interested in obtaining a term life insurance policy [link to Understanding Term Life Insurance post] with coverage for between 10 and 30 years, it is possible to skip the medical underwriting process with no-exam term life insurance.

What Is Medical Underwriting?

It’s a process that helps insurance companies determine your health risk so they know how much to charge you. The bigger the risk you pose, the more your insurance company wagers they will have to pay your death benefit during your coverage period. To cover their risk, they charge a higher premium.

But it’s a good option for younger people who want term life insurance but are concerned about disqualifying due to a chronic health condition. It’s also good for those who don’t mind paying a higher premium to avoid the insurance health exam. You only have to fill out an online health questionnaire.

The time-saving factor is understandable, as medical underwriting involves a battery of medical tests, blood, urine, blood pressure, and so on.

Nearly all life insurance companies have a questionnaire. But they typically only ask about your gender, age, lifestyle habits, and any risky hobbies you indulge in.

Easy peasy.

The best part is, you walk away with all the benefits of a term life policy at a locked-in rate and a guaranteed payout of up to $2,500,000 should your family lose you unexpectedly.

It pays to shop around. You just might find the best life insurance company at the lowest rate despite a health condition. Because as underwriting algorithms improve, fewer insurance companies are requiring medical exams.

Also, the list of disqualifying conditions is smaller than you think. These circumstances include, but aren’t limited to:

  • Cancer
  • Organ transplant
  • Kidney disease
  • HIV positive or AIDS
  • Heart or artery disease
  • Lung disease
  • Hepatitis B or C
  • Gastric bypass
  • Crohn’s Disease
  • Multiple Sclerosis
  • Bipolar Disorder
  • Drug or Alcohol abuse
  • Epilepsy

Unless you fall into a disqualifying category, don’t let a trip to the doctor prevent you from getting life insurance. It’s too important. Your family depends on you.

Interested in the cheapest no medical exam life insurance? Compare life insurance companies today..

How to Select a Beneficiary

How to Select a
Life Insurance Beneficiary

How to Select a Life Insurance Beneficiary

One potato, two potato, three potato, four…remember that game? Whoever you landed on was It.

Picking a life insurance beneficiary isn’t like that.

Your beneficiary will be the one receiving and managing the money from your life insurance death benefit after you pass away. How do you want that money used? Who will need it most? It’s important you choose the right person and reevaluate that choice as your circumstances change.

Who Can Be a Beneficiary?

Pretty much anyone. It can be:

  • your spouse or domestic partner
  • your children
  • your parent(s) or another family member
  • a charity
  • a friend
  • a business partner
  • A trust

Just know this. If you don’t choose a beneficiary, one will be chosen for you.

Why You Need a Beneficiary

Your death benefit—the one you’ve paid premiums into—must go to someone. A death benefit with no beneficiary goes straight to your estate. Which sounds okay. Except that going through your estate will keep the money tied up in probate court for six months to a year.

If after you die your family needs immediate financial support to make up for your lost salary, pay the mortgage, clear debts, pay taxes, and pay your funeral expenses, well, they’ll just have to wait. Also, your estate pays the legal fees, leaving your loved ones with less than you intended.

Tips for Choosing the Right Beneficiary

Who will benefit from the money the most? 

Be specific. Is it your minor children? Then your spouse probably makes the best choice as minor children can’t inherit assets directly. If you haven’t specified precisely by whom and how your death benefit will be managed, the court will assign a guardian to make those decisions on behalf of your children, not you.

Do you want to leave your benefit to more than one person?

If you would like your benefit distributed among a few people, make sure you identify them by name (“children”, for example, is too vague). And stipulate the percentage of your death benefit each will receive. Percentages are a better measure than dollar figures as your death benefit amount may fluctuate, depending on your policy.

Keep your beneficiaries up to date with each major life change.

Life changes include marriage and divorce, each of your children’s births, when your adult children leave the house, and if you become responsible for your aging parent(s). Keeping your policy up to date will avoid misunderstandings, like having your death benefit go to your ex-spouse because you forgot to update your life insurance policy.

Keep your life insurance policy aligned with your will.

When there’s confusion about who gets what, the insurance policy, being a legal contract, will supersede the will. (See above paragraph regarding an ex-spouse).

What If My Beneficiary Dies Before I Do?

This is where your second, or contingent beneficiary, comes in. And choosing a contingent beneficiary is every bit as important as choosing your primary beneficiary.

This is especially true if you have children and your spouse predeceases you. If you want the money to go directly to your children but they are too young to manage it, set up a trust and make the trust your contingent beneficiary. The trust, managed by the legal guardian you’ve chosen to raise your children, will manage the trust to make sure your children’s needs are cared for and relinquish whatever money remains in the trust once they reach early adulthood.

A quick caveat: If one of your chosen beneficiaries receives financial assistance for a special need or disability, be aware that if you leave them more than $2,000, it may cause them to lose that subsidy. Make sure you take this into account.

Many insurance companies allow you to choose more than one person or organization as your contingent beneficiary.

For example, if you are married without any children and your primary beneficiary, say your spouse,  dies before you do, you can divide your death benefit between your aging parent and your favorite charity.

Are there Certain Requirements or Restrictions?

It depends on the state you live in.

Some states have community property laws, which mandate that all property obtained during a marriage is equally owned by each partner in that marriage.

This means that, if you do not want your spouse to inherit your entire death benefit, he or she must sign a waiver that relinquishes their right to half of your shared assets.

States that have community property laws include:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington

It also depends on the insurance company, for a different reason.

If an insurance company suspects that a beneficiary has coerced the benefactor into assigning them as a beneficiary, the insurance company will refuse to issue the death benefit. Which then makes it part of your estate. So, if you end up sad and lonely in your old age, don’t get too chummy with your at-home healthcare worker. Your children—and your insurer—will not remember you fondly.

Got a beneficiary or two in mind? Get a term life quote today..

A Simple Guide to 30-Year Term Insurance

A Simple Guide to 30-Year Term Insurance

A Simple Guide to 30-Year Term Insurance

First things first: what is term life insurance?

Unlike permanent life insurance  that covers you for life, term life insurance charges a fixed premium for a fixed amount of time. You buy a policy for 10, 15, 25, or 30 years and pay a locked-in premium for the length of the term. If you die before the policy term expires, your family receives the exact benefit amount stated in the policy.

Think of it this way:  Term life insurance is more “if you die,” whereas other types of life insurance come with a “when you die” mindset.

Why should I choose a 30-year term life insurance policy as opposed to say, a 20-year term?

Value. A 30-year term policy provides the fullest amount of coverage at an optimal amount of savings.

Let’s say a 30-year-old husband and father of two purchases a 30-year term life insurance policy while his children are in elementary school. That policy will cover his children until they are in their early 30s and shield his spouse from assuming the burden of his lost income, their mortgage, and other debts.

By the time the policy expires, he will most likely have accrued enough assets to protect his family’s financial future without life insurance. Or, he can purchase or convert to another policy.

Also, a level-term life policy is a sturdy anchor to build around. You can add riders to protect your family should you suffer a terminal or chronic illness or cover any other unfortunate events.

Let’s take a look at a 30-year term life’s pros and cons.

30-YEAR TERM POLICY PROS 30-YEAR TERM POLICY CONS
Locked-in rate – even if you get sick while your policy is active.
Not so with shorter terms.
It’s the most expensive level term insurance available. Shorter term policies are less expensive.
Provides financial protection for your children when they’re most vulnerable—from childhood to early adulthood. It’s not an affordable option for people over 45.
Covers your salary, your mortgage, and outstanding debt. It may not make sense for a childless couple or family of three with a shorter-term mortgage and less debt.
Provides only what you need if you need it; frees you to invest in wealth-building vehicles like college funds, IRAs, stocks, and the like.
Many term policies do not require a medical exam; all term policies shield you from the mandatory medical exam inherent in a permanent policy should you decide to convert to one later.
Benefits are 100% tax-free.

 

30-YEAR TERM POLICY PROS

  • Locked-in rate – even if you get sick while your policy is active. Not so with shorter terms.
  • Provides financial protection for your children when they’re most vulnerable—from childhood to early adulthood.
  • Provides only what you need if you need it; frees you to invest in wealth-building vehicles like college funds, IRAs, stocks, and the like.
  • Many term policies do not require a medical exam; all term policies shield you from the mandatory medical exam inherent in a permanent policy should you decide to convert to one later.
  • Benefits are 100% tax-free.

30-YEAR TERM POLICY CONS

  • Is the most expensive level term insurance available. Shorter terms are less expensive.
  • It’s not an affordable option for people over 45.
  • It may not make sense for a childless couple or family of three with a shorter-term mortgage and less debt.

Is a 30-year term policy the best life insurance for You?

That’s a decision only you can make. But some factors for you to consider include:

  • The policy’s cost
  • Your age and the age of your dependents
  • How many dependents you have
  • Your current and expected financial obligations

Here are the factors life insurance companies consider:

  • Your gender – men pay higher premiums
  • Your age – their risk of payout grows with each year your policy is active
  • Your general health – the healthier you are, the less likely they’ll have to pay a benefit
  • Your lifestyle (habits and hobbies) – the more you smoke and drink, the more likely they’ll have to pay your benefit

The main takeaway is this:  A 30-year policy is the best term life insurance plan for young professionals buying their first home and starting a family. It will provide for their children when they’re financially vulnerable and shield any other dependents from assuming large debts with less income.

If that sounds like you, keep this in mind: Even if 30-year term life insurance rates are higher than other level term plans, the value it provides makes your premium worth every penny. You pay a fixed rate that covers only what you need during a period when your family may need it most.

Find the best life insurance for you. Get a life insurance quote today. 

How Much Life Insurance Do I Need?

How Much Life Insurance Do I Need?

How Much Life Insurance Do I Need?

If you’re asking this question, you’re taking your future seriously.

Thinking about death is uncomfortable. Perhaps that’s why people purchasing life insurance often rush to an online calculator and punch in some arbitrary number they imagine their family can live on just to get the whole process over with.

Does that approach work?

Nope. According to Nerd Wallet, 30 million people with life insurance coverage are underinsured.

If you’re one of the millions who prefer conducting purchases online with minimal human intervention, is it possible to pinpoint how much life insurance you need on your own?

Yes. There’s even a formula or two.

How to Determine How Much Life Insurance You Should Have

Before you start shopping for life insurance companies online, take a thoughtful look at the following factors: Age, Life Expectancy, Health, Debts, Assets, and Income.

Age

Unlike with car insurance, the younger you are when you purchase your life insurance, the less you’ll pay in premiums. If you’re just starting out, consider a term life insurance policy. That will save you even more money in the long run and may avoid a future medical exam to boot.

Life Expectancy

According to most sources, the average person will enjoy their 78th birthday. However, life insurance is about what happens if you don’t live that long, right? What you need to consider is how long your dependents will live and for how long they will need financial assistance.

Health

You and your dependents may be healthy now. But what about 30 years from now? Does your spouse have a family history of cancer or heart disease? Do any of your children have special needs?

Do you or your dependents smoke? Smoking raises your insurance premium up to three times the regular rate. If you stop smoking, your rate will come down.

Also, advances in artificial intelligence technology across the insurance industry have improved accuracy in determining risk factors, which improves trust between those selling and those buying the quotes offered.

And if you smoke, drink, or have a risky hobby, don’t lie to the insurance company about it. Advanced technology also improves the likelihood that you will get caught and your family denied benefits.

Debts & Assets

If your assets outweigh your debts, you may not need as much life insurance.

Debts include things like car loans, credit card balances, and tax debts. You don’t have to include your federal student loan balance. It’s canceled upon your death. But you may want to factor in your funeral expenses here.

Assets include your savings, your investments (mutual funds, stocks, and bonds), your retirement savings (IRAs and 401Ks), and any other insurance policies you have.

Income

Questions to ponder:

  • Are you your family’s sole source of income?
  • If so, how much replacement income will your family need if you pass away? For how long?
  • Is your salary your only source of income, or are there other income streams?
  • If your spouse is responsible for day-to-day household tasks, how much would you need to cover housekeeping and childcare costs if they had to make up for your lost income?
  • Do you have any children who will need special care into adulthood?
  • Do you have dependent parents who will need their care costs covered?
  • Are you a business owner? There are insurance options that will cover the costs of keeping your business going or to help your beneficiaries sell the business in the event you pass away before you are able to sell or retire.

Quick & Simple Formulas

As promised, here are three simple formulas to give you an idea of how much life insurance you need to give you and your family peace of mind.

FORMULA 1:  Annual Salary x Years Left to Retirement

Multiply your current salary by the number of years you think you will continue to work.

FORMULA 2:  Annual Salary x 10 + –

  1. Add up your debts.
  2. Add up your assets.
  3. Multiply your current annual salary by 10.
  4. Add your total outstanding debt figure to that number.
  5. Subtract your total assets figure from the step 4.

The final number should give you an idea of how much life insurance you need.

FORMULA 3:  DIME Formula

DIME stands for four factors: DEBT, INCOME, MORTGAGE & EDUCATION.

Debt factor

Add up your debts, including funeral expenses. Do not include your mortgage.

Income factor

Determine how many years your family will need your income should you pass away. Multiply that number by your current salary.

Mortgage factor

Determine how much you still owe on your mortgage.

Education factor

Estimate your children’s college costs. Exclude anything you’ve already saved for their education.

Add up the totals from each of the four factors. That should give you a comprehensive idea of how much life insurance you need.

If you’re spinning out from the totals you just generated, it’s not as bad as you think. According to the Life Insurance Marketing and Research Association, 50% of Americans believe life insurance costs more than it does. They’re wrong.

What you actually end up paying may surprise you—especially if you opt for level term life insurance. You can pay as little or as much as you want for as little or as long as you want. Permanent insurance premiums are more costly.

No matter which type of insurance you consider, compare at least three quotes before making a final decision. Life insurance companies vary in the premiums they offer. Make sure you find the best deal for your family.

Find out how much you can save on term life insurance. Get your life insurance quotes comparison today.

 

What Is Permanent Life Insurance?

What Is
Permanent
Life Insurance?

Permanent Life Insurance: What Does a Permanent Policy Include?

Simply put, a permanent policy provides lifetime coverage.

There are two primary types of permanent insurance: Whole Life and Universal Life. And while you can combine the two in various ways to meet your individual needs, for the sake of simplicity, let’s establish a basic understanding of Whole and Universal life insurance before trying to mix them.

In addition to lifetime coverage and a death benefit, each policy type generates cash value you can access when you need it. Both require a health screening.

What sets them apart is how they manage the cash value they generate.

1st Type of Permanent Life Insurance: Whole Life

Whole Life is by far the most expensive option available. It offers a fixed-rate premium and guaranteed death benefit, meaning the amount you pay every month and the amount your beneficiaries receive upon your passing will never change.

It also generates cash value based on your monthly premium. The premium the insurance company charges is higher than the cost of the policy itself. The insurance company invests the difference in its financial portfolio, earning you money based on its performance.

2nd Type of Permanent Insurance: Universal Life

Universal insurance is slightly cheaper and more flexible. With a Universal policy, the amounts you pay for your death benefit and premium payments can change due to the fact that your policy’s cash value is determined by the interest your payment generates, rather than your insurance company’s portfolio performance. And, as we all know, interest rates fluctuate, which can work for or against you.

If my Permanent Policy Generates Cash Value, How Can I Use It?

You can use your generated cash value for a number of things, including:

  • Home purchases
  • College tuition
  • Retirement funds
  • Charity donations
  • Paying your premium
  • Increasing your death benefit
  • Paying off personal or business debts
  • Collateral for bank loans

Best of all, withdrawals are tax-free up to several million dollars. However, taking the money out of a premium policy may decrease the death benefit. And if you die before you pay off a loan you made against your insurance policy, your heirs will be responsible for it.

The wealth-building benefit of permanent life insurance is tempting. But not everyone can afford permanent life insurance rates. If you’re young and have the income, investing in a permanent policy may make sense. You can pay a higher premium at the beginning of the policy, then once it’s paid off, you can invest in other things and never worry about making a premium payment again.

Sounds Good. But I Simply Can’t Afford a Permanent Policy Right Now.

Consider a term life insurance policy, then. It’s your least expensive option because you pay only for what you need, only for as long as you think you will need it. You pay a fixed premium and your family receives a fixed death benefit—without locking yourself into a higher premium. Because once you lapse, you lose.

You can always convert to a permanent policy when you have the income to afford it. And when you convert a term policy to a permanent one you avoid the health screening a permanent policy generally requires. This conversion benefit is particularly handy when you consider how our earning power tends to increase while our health tends to decrease as we age. Plus, with a low, fixed-level premium, you can invest your money in other ways and buy that permanent policy sooner.

Save those high life insurance premiums and medical exams for later. Get a term life quote today.

5 Types of People Who Need Life Insurance the Most

5 Types of People Who Need Life Insurance
the Most

5 Types of People Who Need Life Insurance the Most

The people who really need life insurance are the accident-prone, heavy drinkers, long-term smokers, and careless daredevils, right? Well, yeah, in a perfect world.

Here are five less obvious types of people for whom life insurance may be particularly useful.

1. Pre-planners

such as…

Independent Millennials.

Why? Because the younger you are, the less expensive it is. And if you wait until later and get sick, you may not qualify anymore.

Parents.

Why? Because if the breadwinner dies, the policy’s death benefit covers his or her salary. Or, if the family caregiver dies necessitating childcare or eldercare, the caregiver’s policy will cover the care costs.

Also, many insurance policies serve as investment vehicles that you can use for college tuition, paying off debt, funeral expenses, or a financial legacy for your kids or a favorite charity.

For parents raising a chronically ill child, a short-term children’s policy may make sense. Why? Because converting a short-term policy to another one when your child becomes an independent adult will prevent them from disqualifying due to their health issues.

2. Business owners.

Why? Because you can structure your policy so that, if you die before selling your business, your partner can buy you out, leaving the proceeds to whoever you’ve designated to receive it. Your children can also use your policy to cover the costs of selling or running the business themselves.

And because your policy covers outstanding business costs, it also protects anyone who has co-signed credit card or loan accounts with you.

3. Tax masters.

Why? Because some premium payments are eligible for maximum tax benefits. Just as with death benefits, insurance company investment payouts are non-taxable, depending on the type of insurance you’ve purchased

Cash value payouts can also pay estate or inheritance taxes.

4. Savvy savers.

Why? Because you can choose a policy that charges a premium payment higher than the policy is worth. Your insurance company can then invest the balance into its own financial portfolio, generating cash value you can reinvest in other assets like property and annuities or to fund your retirement. You can also withdraw all or part of your insurance equity in an emergency. Withdrawals are tax-free up to several million dollars.

5. Debtors.

Unlike transgressions, debts are not forgiven. Life insurance protects your heirs as well as your co-signers from debt collectors. Thankfully, student loans are forgiven.

The fact is, we all grow older. As you’ve read this blog post, you’ve aged a minute or two.

Take a few more moments and think…how will you fund your life when you can no longer work? Will your loved ones have enough money to live comfortably after you pass on?

No matter who you are, what stage of life you’re in, or what you choose to do with your money, life insurance makes sense. Find affordable life insurance today.

Understanding Term Life Insurance

Understanding
Term
Life Insurance

Understanding Term Life Insurance: Less Expensive, More Specific. No More, No Less

Talking about life insurance isn’t as enjoyable as talking about say, last night’s game or your daughter’s first ballet recital. But it’s a necessary conversation.

And the topic can be overwhelming. You probably already know that life insurance protects your family if you pass away, and you pay for it with monthly premium payments while you’re still alive.

What you may not know is that term life insurance is a less expensive option.

How is Term Insurance Different from Other Types of Life Insurance?

Other insurance types provide lifetime coverage but are at least three times more expensive. Term life insurance companies charge a specific premium and pay a specific death benefit within a specific period of time. No more, no less.

Lifetime coverage can offer investment opportunities, but that’s why you’ll pay a significantly higher premium. Because term insurance is sold in limited time increments, the insurance company assumes less risk, so you pay less in premiums and your family receives a fixed benefit if you pass away.

Not everyone is at a place in their lives where they can afford to pay for lifetime coverage. Term life gives you control over how long you want to pay for coverage and how much you want to spend on monthly premiums.

Are There Different Types of Term Life Insurance?

There are two types: level term and renewable term.

With a level term plan, premiums and benefits remain constant for the entire coverage period. And you must buy at least five years’ worth of coverage. It may or may not require a medical exam to renew it once the term is up. This plan is perfect for young families or young, single professionals who expect to increase their income as they grow older.

Renewable term life insurance is bought on an annual basis. It’s cheaper than level term in the short run but will increase every year as you age. However, you don’t have to submit to any health questions or medical exam to renew your policy, which makes it ideal for people predisposed to developing a health condition as they grow older.

There are several clauses you can add to further personalize your plan for level or renewable term policies, but that’s another discussion.

How Do I Choose the Right Term Policy?

You must ask some difficult questions. How do you envision your family’s life without you? If you were no longer around, would your son still be able to play league soccer? Would your family be able to pay for your daughter’s dream wedding with you not there to walk her down the aisle?

Will they both be able to go to college?

Some variables to consider include:

  • The number of beneficiaries you choose
  • The standard of living you’d like them to enjoy
  • Your current health
  • Your current debt and cash flow

Because life insurance is such a hefty topic, many people find that a quick chat with an insurance professional clarifies the options and lightens the decision-making process. No more, no less.

Or, if you’re ready to start shopping, get a quote for life insurance online now.

Importance of Life Insurance

The Importance of
Life Insurance

Why You Need Life Insurance Sooner Than You Think (and Why Term Insurance Makes Sense)

Paul’s dad started pestering his 29-year-old son about buying life insurance soon after Paul got married. Paul kept putting it off. He and his wife wanted to travel. They bought a house. When they had a baby boy who was diagnosed with autism, they decided she would stay home to care for his needs. Money from Paul’s $130,000 salary came in and went out. And Paul lived in the moment through the good times and the bad.

Then a car skipped over a median and split Paul’s car in two. The wide eyes of the driver in the other car were the last thing Paul ever saw.

No one saw it coming. So no one planned for it.

With no death benefit from a life insurance policy, her son’s daycare costs and medical bills, and her inability to earn what Paul had brought in, Paul’s wife filed for bankruptcy five years later.

Life Insurance Is Important

Most of us are too busy living life to think about what happens when we’re no longer living. But the following statistics may encourage you to stop a minute and take stock.

  • According to the National Funeral Directors Association, the average funeral expenses total $7,500.
  • According to reporting by CNBC.com, average annual childcare costs are more than $10,000.
  • According to emarketer.com, the average outstanding mortgage loan debt is $177,477.
  • According to a study conducted by nerdwallet.com, the average credit card debt is $6,006.
  • According to U.S. News & World Report, a middle-class annual income in a three-person U.S. household hovers around $200,000.
  • According to the United States Census Bureau, the medical debt the average American family carried in 2021 was around $2,000.

If you take out your calculator, the math is sobering for the average family with kids. And if you think you can’t afford life insurance, you’re not alone.

According to a recent Bankrate article, 42% of millennial-aged adults think a $250,000 term life insurance policy costs $800 more per year than it really does.

Term insurance makes life insurance doable—especially if you start early.

Why Term Insurance Makes Sense

It’s simple.

You pay a low monthly premium; your loved ones receive a guaranteed lump-sum death benefit.

You decide the benefit amount and the length of coverage you need. Every penny of your paid premiums goes directly toward your death benefit.

It’s tax-free.

Unlike permanent insurance, term insurance does not yield dividends, which allows your family to keep the entire death benefit amount. It frees you to invest your money elsewhere to secure your family’s financial future.

Why tie up your earnings in a permanent policy when it may make more sense to invest them somewhere else?

It’s cheap.

The sooner you buy, the cheaper it is. A $1 million death benefit will cost a healthy 35-year-old man a monthly premium of around $35.

If your needs change as you get older, you can always adapt the policy to meet those needs by adding clauses when you renew or convert to a more permanent policy with extra features.

Paul’s wife eventually landed on her feet. After her bankruptcy went through, she found an excellent job with a salary that provided her and her son with a healthy standard of living. And when her son grew older, she remarried.

But had Paul listened to his dad, he could have saved his wife and son from darkly desperate times.

Protecting your family costs less than you think. Get online life insurance quotes today.