Life insurance isn’t something young people often think about. Yes, we are talking about millennials that have their whole lives ahead. However, even though purchasing life insurance doesn’t occur to people in their 20s and 30s, in reality, it is the best time to take this step. Why? Well, because of the monthly premium. Generally speaking, if you are in your 20s and are in great health, the monthly expenses can be as low as £10.
Still, every person reaches that point in life when they start planning their finances for the future. They set specific goals they want to meet in the foreseeable future, and finance management is one of the skills they have to master. Financial planning includes everything from earning money, protecting assets to preparing emergency funds. So, how does life insurance fit in? Well, it is actually essential, and in the following article, we will tell you why.
Paying off debts
One of the major milestones is everyone’s life is property purchase. However, buying a house is a significant investment, which is why most people opt to apply for a mortgage with their spouse. This is a debt you will be paying off for numerous decades to come, but what would happen if one of you were to die?
We know, no one wants to think about this, but let’s be honest – it is something you have to consider. It is the only way to plan the future and make sure your spouse doesn’t get burdened with the debt they simply cannot pay off. If you were to have life insurance with your spouse being the beneficiary, they would receive a significant sum of money upon your sudden demise. These funds would allow them to settle the debt, and it would also prevent numerous issues from happening in the future.
Every parent wants their child to receive the best education possible. It is why they set a college fund as soon as they learn they are expecting. The average expense of in-state college is over £20,000. Yes, it is a lot of money, and you will need many years to reach this goal. So, how can you expect your spouse to succeed in this alone after you are gone?
Yes, you can design a policy that meets all your requirements, and in this case, you can include future expenses for your child’s education. If you agree with us that is the greatest gift you can give to your child, visit the lifecoverquotes website to learn about different types of life insurance policies and find some tips on how to choose the best one for you.
Covering the funeral
This is another thing a lot of people don’t think about, but the cost of funerals is very high nowadays. Depending on whether you want to be buried or cremated, and whether you want a full funeral or a memorial service, this expense can vary between £2,000 to an astonishing £15,000.
In most cases, grieving families don’t think twice about covering this cost, which means that oftentimes they dip into their savings or emergency fund. On the other hand, some of them apply for loans that they cannot return, leaving them in financial trouble.
You see why having an insurance policy is beneficial during this time, right? Basically, it will enable them to organize everything just the way you wanted without having to worry about the expense and whether they can cover it.
Caring for a family member
If one of your family members depends on your financial support, the life insurance policy is crucial. Maybe you have a child with special needs or a parent who suffers from a degenerative illness. Either way, this policy is the only way to ensure that they will be taken care of in case of your early demise.
Their care costs a lot of money, and without the funds from the policy, your family will probably be forced to take out loans and enter the vicious circle of debt. There are multiple factors that affect the cost of special care, and you cannot expect them to be taken care of for the rest of their life, but these funds can be of great help, at least at the beginning.
Protect your children
If you are a single parent, you should seriously consider taking out this policy. Even if you aren’t in debt and are not living paycheck-to-paycheck, your kids would be left alone if anything was to happen to you, You probably think that one of your family members would take them in, and that is perhaps true, but still, you have to consider the cost of raising children that have just entered their family.
Even if this policy appears to be just another expense you have to pay every month, you can never know what will happen, so you have to do what you can do to stay on the safe side. As we have already mentioned, there are many types of insurance policies, so you should go over your budget and find the one you can afford.
Buy it early
We have already mentioned that people should take out this policy when they are young, in their 30s, if not their 20s. The fact is that the cost of insurance will increase with every passing year. Why is this the case? Well, simply because you are getting older.
If you want to be responsible and create a bullet-proof financial plan, then you should purchase a life insurance policy. This is true even if you don’t have any medical issues or haven’t been treated for depression and substance abuse. People like to believe that none of these things will ever happen to them, but the truth is no one can know this. What’s more, if some of these problems were to occur, not only would you have to pay for a higher monthly premium, but the insurance companies could also deny your application.
All in all, to avoid any of these potential problems happening in the future, you should start looking for a policy as soon as you start working on your financial plan.