With every new life event—new job, baby, house, and more—figuring out a new daily rhythm is often top of mind. Sometimes financial planning for long-term goals inadvertently placed on the back burner. Should you start planning for college as soon as your baby is born? Should you purchase life insurance for your little one? Just how does insurance help with your family financial planning? When should I get in touch with an insurance agent?
The questions may feel overwhelming especially when you’re just trying to get your baby to sleep through the night. However with the right insurance coverage, you can get peace of mind knowing that despite unfortunate circumstances, you’ll stay on track to meet your financial and lifestyle goals. Learn how the different types of insurance plans can help you improve your family financial planning.
Life Insurance
Life insurance is often regarded as protection from future circumstances—and sometimes this perception puts off the urgency to buy life insurance. However, life insurance is widely considered the easiest and most cost-effective way to plan for the future—even before investing. The first and most important aspect of life insurance is that it protects your loved ones from financial burden in the event of your death. That’s why life insurance is probably hard to talk about—death is an unpleasant subject, but being financially prepared in the event of unfortunate circumstances is a necessary part of family financial planning.
Make sure to ask your insurance agent about the different types of life insurance products. For example, some life insurance policies—whole life, universal life, and variable universal life—offer a cash value. In other words, part of your insurance premium goes toward your cash value. It’s similar to the idea of a savings account. Before you sign up for life insurance, make sure to ask your insurance agent more about policies that offer cash value.
Disability Insurance
Although it’s a lesson common policy, disability insurance is another type of insurance that can help with your family financial planning in the long term. Many people, unfortunately, find themselves unable to work due to accidents or other medical issues. With extended medical issues, people often exhaust their savings accounts. That’s when the medical bills start piling up. Being forced to take a break from word due to medical reasons affects more than your day-to-day living, but also your earning power in the future and ultimately, it sets back your retirement plans or earnings.
However, disability insurance covers these types of scenarios and insures that you still have cash coming in despite not having the ability to work. Some employers offer disability insurance as a benefit and a way for employees to increase the disability coverage (this will require you to increase your premium.) If your employer doesn’t offer disability insurance or the policy is insufficient, you may want to inquire about individual disability coverage from your agent.
Sometimes people doubt that they need disability insurance or that they are too young to start considering it. However, the whole idea behind financial planning is preparing for the future. Disability insurance and life insurance policies are among the tools that can help you prepare for unfortunate circumstances and also keep you on track with your financial goals. It’s never too early to start making financial plans for the future.
Having to think about family financial planning can be so overwhelming. Take the time to write down your questions and just make sure you do some research before you purchase.
Well said!