Worried about the current situation? Let’s get you covered and jumpstart your preparations for the next pandemic crisis at the same time! We already discussed the need to be a step ahead of the crises that come periodically regardless of what you do. The time for you to start preparing for the next one is now. Money is tight now, that’s understandable. Despite this, you can still jumpstart your preparations in a cost efficient manner.
Where to Start?
First, you should review your money saving strategies, your monthly overhead and find budget cut options. This should give you some concrete result. A number you can work with. Once you have this number, you need make a plan. Presuming your monthly overhead already includes putting money aside for retirement, it is time to create your pandemic fund. Yes, part of a pandemic reality is death. No easy way to put it. If you should pass away, what do you leave your family with? Is it enough? Or is it generally just a bunch of bills, such as mortgage payments? It is definitely a good idea for your pandemic fund to include a product with a death benefit.
Life Insurance Options
The basic purpose of any life insurance is a death benefit. What type of life insurance should be included in your pandemic fund depends on the money you’re able to put in. Whether you get a whole life or a term policy, they both have a death benefit. In case of term, the disadvantage is that you will never have any personal benefit from it. It is a type of policy that provides money to the beneficiaries in case you pass away. Low cost way to cover your debts, or protect your assets such as real estate. It is not a way to create a cash pile to tap into in case of a crisis.
The second option is a whole life policy. This develops cash value over time. It does not develop significant cash value in the first few years. However, the face value (guaranteed death benefit) is available from day one. Just like in case of a term policy mentioned above. A whole life policy requires greater monthly contributions, but if your budget can manage it, it is the way to go.
Jumpstart Your Preparations for the Next Pandemic Crisis
On the other hand, if money is tight, a good way to start is with a 10 year term life for example and after a year or two, convert this policy into a whole life type. This will secure a good amount of coverage even for the future. The conversion is an option and its timing depends solely on your finances. The presumptions is that in two years, you’ll have more money to contribute as you’ll recover from the current crisis. The exact numbers is something to be worked our with your insurance broker.