Far too many people think that they only need life insurance when they get married and have children. Between your student loans and all the other monthly expenses that add up, you might think that paying your rent is more important and that you can put off life insurance for a few years or more. The truth is that it is never too early to make the leap. Some companies even offer plans that parents can purchase for their babies and teenagers. If you want to keep your family secure after you pass away, you can buy a policy that meets your needs today.
The Rising Price of Coverage
An important thing to keep in mind is that the cost of life insurance increases as you age. When you’re fresh out of college and starting your first real job, you can get a basic plan for just a few dollars a month. The price of that policy will increase when you hit your 30’s and as you reach other milestone ages. By the time that you get around to buying coverage, you might spend nearly as much each month on insurance as you do for a new car.
Unsecured vs. Secured Debt
All debt falls into two categories: secured or unsecured debt. Secured debt refers to anything tied to something else. A good example might be a home equity loan that you take out to make repairs to your home. If you default on that loan, the lender has the right to foreclose to recoup its losses. Unsecured debt refers to the debt that you have that is not tied to any physical property. This can include credit cards, student loans and medical bills. If you pass away without an insurance policy, those creditors can go after anyone else listed on the debt, or possibly the estate, for the full amount.
Funeral Costs
The average cost of a funeral in the United States can easily climb to between $10,000 and $20,000 or even more. Unless you have significant savings, your loved ones may have a hard time paying for those expenses. Not only do they need to pay for interment or cremation, but they also need to pay to have your body moved and for the service. A basic insurance policy allows your loved ones to cover your funeral expenses without any worries.
How Much Life Insurance Do You Need?
An easy way to decide how much life insurance coverage you need is with a look at your finances. You may want a policy that will pay off your mortgage and any car or other loans that you have. Families often look for plans that will allow the surviving parent to remain at home with the kids full-time. The best policies will cover all of your bills and leave some money left over. No matter how old you are, you can get a life insurance policy but the best time to purchase one is when you’re still at a young age as plans are the most affordable.
