Sooner or later, an encounter with a financial advisor might happen, and they’ll try to talk you into life insurance.
You may have a wife/husband, children, or might be on your late 20s or early 30s but any age can invest. Financial advisor’s presentation is intriguing. Thinking if it is a scam, then surely inside your mind he might lure you. A question pop up through your head, Is life insurance really helpful?
Then your mind will start asking follow-up questions. Why life insurance is important ? is life insurance really helpful? is it worth it ?
The mind will always do the trick. And sure it is normal to doubt and hesitate about the ups and downs. One must assess everything before setting foot on to the next step.
So here are some tips or guides before stepping up on pursuing for a life insurance, and determine if life insurance really worth it.
At first, you should always treat life insurance for what it is designed for and not as an investment tool. Don’t confuse it with the latter, because it’s really worth might not be substantially seen.
This can’t be said enough. One reddit user stated that he had his life insurance license then let it lapsed and worked on life products for a major insurer. Life insurance isn’t an investment product. However, you should still buy life insurance in your 20’s.
You buy life insurance when you are young to insure your insurability. Right now, you are young and healthy so you can buy a policy. As long as you keep paying the premiums you can keep that policy without another health exam. The longer you wait the bigger the gamble that you won’t be healthy enough to buy a policy and will be uninsurable.
As the reddit user explained:
“I’m a great example. I’m luckily had life insurance since I was 18 and gave maintained the policy. At 31 I woke up one morning with blood clots in my lungs. Now I can’t buy life insurance. I’ll always be able to keep the policy that I have but if I didn’t have that policy, I would not be able to get life insurance without paying extremely high rates.”
Is life insurance really helpful or worth it ?
If your wife/husband or anyone else depends on your income then yes.
Do you plan on having kids in the next few years that will depend on your income?
Yes. The younger and healthier you are when you get a term policy, the cheaper it is and the longer you can get one. It is surely not a bad idea to shop some 30 yr policies if you are healthy and looking to start a family. The risk of waiting is a slight increase in cost and the possibility you may have a medical event that renders you unable to get a good policy. Small but possible risk.
Then you think, could both of you live comfortably without the other’s salary?
If yes, then at the moment you don’t “need” life insurance. However, there are two reasons to consider buying it: If one of you died, it would allow the other to take time away from work to grieve.
Buying a term life policy now means you’ll be locking in a fairly cheap price. The same policy will cost a lot more in say, your 40’s. The policy people your age doesn’t consider but absolutely should have: short- and long-term disability insurance. Anyone at any age can be sideline by illness or injury and the economic effects can be devastating without it. Also, cheap when you are young and healthy.