I am a millennial and I constantly discuss methods and strategies that my generation can use to eliminate student loan debt. Despite the chaos of the pandemic and the economy the internet still presents leverage to create wealth. Recently I just purchase a life insurance policy through Tru Stage Insurance Agency with assistance from my credit union. I believe it is one of the smartest things I have done to help my family build wealth. I am still under the age of 30 but I want to be prepared for the future and this is usually the best time to purchase a life insurance policy.
What is a life insurance policy? A contract between an insurance policy holder an issuer or assurer, where the insurer promises to pay a designated beneficiary a sum of money in exchange for premium, upon the death of an insured person.
There are several types of life insurance include term life insurance, whole life insurance, universal life insurance, variable life insurance, simplified issue life insurance, guaranteed issue life insurance, and group life insurance. The two most common of life insurance are term and life insurance. Some types of life insurance come with a cash value amount that works like savings or an investment account.
Boyd Insurance & Investments published an article entitled ” 5 Reasons Millennials Need Life Insurance” and I believe that this was a great article. These are the five following reasons cost of life insurance are lower, loans don’t disappear, others depend on your income, funerals are costly, and employer insurance may not cut it. Life insurance policies are usually based on several factors. The benefit of being young when purchasing a life insurance policy is you pose less of a liability to the insurance company. If you do not smoke or drink life insurance companies appreciate this more.
Life insurance can help pay for financial expenses if you pass away too soon. That student loan debt could fall upon your parents or spouse so investing in a life insurance plan could alleviate financial stress. Additionally, your life insurance policy can provide income for your spouse or children. Even if you are not married with children yet this is a great method to leave wealth behind for your loved ones.
Funerals can cause financial stress for a family. On average funerals usually cost $8,508. Imagine losing a loved one and not being able to pay for the funeral cost. As we all know funerals and weddings unleash pandora’s box of tension that manifest into major conflicts. Finally the most important reason if you lose your job, you lose your life insurance plan provided by the company. Also if you leave the company you cannot take your policy with you. Having an individual policy outside of your job is a great choice because you can get a better policy and you would get the right amount of coverage.
A life insurance policy creates wealth in three ways:
I. People purchase life insurance so that when they die their family or beneficiary will receive the benefit.
II. Also a life insurance policy can be taken out on someone else such as parents, and make themselves the beneficiary so when that individual dies they receive the death benefit. Although in order to do so the beneficiary is required to (1) obtain permission from the insured person and (2) demonstrate an insurable interest (proof of exposure to financial loss as a result of the insured’s death).
III. You can always sell your life insurance policy to access the money early may obtain a partial settlement if you need access to money early. Technically this not the best wealth strategy but it gives one an opportunity to access the money early.
Wealth Always Reigns Supreme