One of the most fundamental functions of life insurance is that you can use it to create an instant estate. However, to be able to create an instant estate through a life insurance product, you must be healthy. Many people want to create an instant estate right after their first heart attack. The insurance companies have a big surprise ready for them at that point. It is called being non-insurable.
Financial Health and Responsibility
Our web focuses on practices of financial responsibility and tries to introduce various techniques and approaches to this topic. It is always a good practice to put aside a part of your pay check for savings. The opinion on how much you should put aside varies. When you’re in your twenties, you generally don’t worry about savings and creating an estate. But even if you do, life may put you in situations, where you need to tap into these funds. Tapping into your long term savings should always be the last resort, but sometimes it’s just how life goes.
Key to a Happy retirement Is Paying Off Your Debt
In your quest toward retirement the key focus should be to maintain a low Debt-to-Credit Ratio. After all it is one of the main indicators that your credit score is based on. Of course, having zero debt is optimal, but in reality, who has that? Especially when you have a family. Children always need something. Between paying your mortgage, car lease, phones and so on, usually there isn’t much left for you to save from. But hey, after all the key number one is to keep your Debt-to-Credit Ratio low.
So far, you’ve done well. You have a family, wife, children, paid off a good part of your mortgage and have a decent income to sustain all that. The concept of midlife crisis is well known. It is all about realizing that you’re youth years are gone. Some try to get this feeling back by going to crazy lengths, but this is not what this article is about. Midlife crisis also carries a financial aspects with it. One of them is the realization that your career advancement usually peaks, the other is the nearing of retirement.
Many people also start to tackle first more serious health issues. And the question that comes to your mind is, what happens to the people around me, when I’m not here? Regardless of when that time comes.
Solution Is to Create an Instant Estate
If you are doing well financially and you are providing a good lifestyle for your family, but were not able to save much, then one of your options is to create an instant estate. This is a step that you can take in one of two cases. Number one is a fairly good state of health. If you are not insurable due to some medical issues, there may still be a way out. If you already own a life insurance policy, say a Term Life Policy, you may be insurable. Same applies if your parents bought a Juvenile Policy for you when you were a child and that policy is still active.
Although Term Policies create an estate, their disadvantage is that you personally can only collect on them upon your death. In other words, they are for the benefit of the ones you leave behind. Term policies also have an expiration date, which means you have to pass away by a certain date. If you miss that date, then you’re not covered. On the other hand their advantage is low price.
Another way you can create an instant estate is to use a Whole Life Policy. As soon as you sign a life insurance contract, your estate is guaranteed to be paid a death benefit upon your passing. Unlike a Term Life Policy, the Whole Life Policy does not have an expiration date. It also offers you a cash value, which is there for you to tap into at any time in various ways. The disadvantage of a Whole Life Policy is high price.
In either way, if you want to go to sleep at night knowing your family is taken care of, then life insurance is definitely something you need to seriously consider.