All of us should be making life insurance a budget priority. While we tend to carefully budget all the other expenses that we have, we oftentimes neglect to shelter our families from less fortunate events.
Death is not something we want to think about, but selecting a list of beneficiaries in case of unexpected death is certainly something that will help. Many of us underestimate the real costs of a life insurance policy and sometimes postpone a similar decision. Below we have some solid reasons why you should put it at the top of your priority list.
It’s Less Expensive Than You Expect
Many studies have shown that we tend to overestimate the cost of a life insurance policy. Millennials, for instance, overestimate the cost of such products by more than 200%, while Gen X thinks it costs on average with 100% more than it actually does.
An estimate for a 20-year term insurance policy for a 35 years old woman, let say, costs a bit over $10 per month. Gen X representatives think that it costs somewhere around $30, while Millennials think it costs more than $40. While whole life insurance policies are a tad more expensive, this still doesn’t meet your expectations. Your “a life insurance policy is too expensive” argument no longer stands, thus.
Tips to Budget for a Life Insurance Policy
When budgeting, make sure to pay increased attention to your expenses. Your income matters and so do your everyday expenses, goals, and priorities. Life insurance policies are mandatory if someone in your family depends financially on you. If you have children, for instance, you simply can’t postpone anymore a decision like this. A great strategy to fit this into your monthly budget is to assess which expenses are mandatory and which ones are not.
For instance, drinking and going out weekly are not mandatory. Giving up those habits will allow you to squeeze in even some whole life insurance rates. Additionally, if you have a gym membership only as an excuse, ditch it and do the same with all the magazines that you receive in the mail if you still do.
Most likely, they end up in the recycling bin without ever taking a glance at those. These tips will allow you to make plenty of space in your budget for a life insurance policy, so there’s no reason for you to postpone a decision like this.
Term or Whole Life Insurance
Each option has some advantages. In many expert’s opinions, a whole life insurance policy allows you more flexibility and peace of mind, as you don’t have to periodically extend it. Also, the cash value is an important advantage you should think about in a whole life insurance policy’s case.
These are some important reasons why should you make a priority out of life insurance, but also some smart ways in which you can achieve this goal. Remember that as long as someone in your family depends financially on you, you can’t afford the luxury of not having a life insurance policy.
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