A lot of people don’t really think about their life insurance. Many employers offer a voluntary life insurance policy, and beyond that, no one asks questions or figures out how to truly benefit from a life insurance policy.
Life insurance isn’t just for the death claim
What most people know about life insurance is that if they or their partner was to die, they would receive compensation in form of a death claim to the beneficiary. Most people truly think of nothing more than the connection between life insurance and death. And that’s not all that it is!
Living benefits of life insurance
There are benefits of life insurance that are still available to you while you are still alive. The way that life insurance works is that there is a cash accumulation over time, in a permanent life insurance policy. This accumulated cash value can be used by you to help you pay for your anticipated and unanticipated expenses and events during your life. Things like medical bills, schooling, buying a home, or a wedding, are all things that a life insurance policy could help you pay for.
How does that work?
When you access and use this cash value, yes, your overall cash value and death benefit will decrease, which is why this life insurance policy isn’t just an endless savings account for you to dip into whenever you please without consequences. If you take a loan out of this life insurance policy, you’ll have to pay it back. The benefit of this is that, in theory, you’re paying yourself back. Not someone else. It’s your money to use, and you want as much money as possible in your life insurance policy. So when it comes time to take money from this account, talk with your agent to make sure that you withdraw cash properly, as well as set up a loan repayment correctly to avoid potential tax consequences.
Why should you buy a life insurance policy while you’re young?
First of all, it never hurts to start planning for your future while you’re young. There is literally no downside to planning ahead financially. A lot of young people worry that they can’t afford life insurance policies because they don’t have a lot of disposable income. With student loans and other bills and expenses, it feels like there is nothing left to go towards an option life insurance policy.
Think of it this way. When you are young, you are at a much lower risk of dying. This means that, in order to open your life insurance policy, your premiums will be a lot lower if you choose to start a policy now than ten years from now when you have more health problems. And not only that, but if you start now while you’re young, your premiums will never increase with age. You’ll be able to reap huge benefits for the remainder of your life, without having to pay more. The longer that you wait, the higher your premium will be, and the less money you’ll have to pay to fund your life insurance policy.
How do I get started and get a life insurance policy?
The first step is to find an insurance agent to help you get started. They can sit down with you and explain different plans, premiums, death benefits, and how the entire process works. Understanding how a life insurance premium payment can fit into your budget will be eye opening, and opening a policy will be life changing and help you in every aspect of your current life, as well as set you up for a prosperous and fulfilling life in your future.