Thinking About Life Insurance Early Pays Off
Unfortunately when we ware young we believe we are invincible
. Nothing will hurt us and nothing will ever happen to us. But that of course is not true. The last thing on your mind is life insurance. You are invincible and death is not going to happen to you. You still have plenty of time to deal with that. We just don't realize how important it is to think ahead, especially when you are young and inexperienced.
When I went to College to study marketing and business administration I did not realize it is more important to study something you actually like, rather than something you think may be a great career. If you do the things you are good at and support them with a solid education you will be just fine in whatever it is you are doing. On the other hand if you are doing something you don't like, you will always be mediocre.
What does that have to do with life insurance? It is the same principle. When you are young you don't realize it is more important to build a solid foundation for your future while you are young, rather than postpone everything to later. It is easy to get good coverage when you are young and healthy. Your premiums are very low and most likely you don't even have to take a health examination.
If you wait on the other hand until you reached the beginning of your midlife crisis, and you start thinking about your vulnerabilities and your realize death might be closer than you thought. Now it is much harder to get decent coverage. Over the years you have accumulated a substantial health history and maybe even some pre existing conditions have been discovered you didn't know about 20 years ago.
Your life expectancy hasn't changed, but you are closer to your expected expiration date, than when you just finished high school. Which means there is a much higher risk for the carrier to insure you, for which they will charge a substantial premium. You can easily end up paying 4-5 times as much, as you would have paid when you were younger. But even worse, you might not be able to buy coverage at all.
Imagine your parents would have bought a 30 year policy when you were just turning sixteen. The premiums would have been dirt cheap and guaranteed through the life of the policy. You most certainly would not have had to have a health examination. Your parents pay the premiums until you finish college or until you get your first job and you are able to afford them yourself.
Because you started when you were so young the premiums really don't have an effect on your daily budget and soon you will have forgotten about them. Simply taking them for granted, a part of your monthly expenses. But now, when you turn forty six you suddenly realize you have saved an enormous amount of money.
The cumulative effect of interest earned on interest, also called compounding, has allowed your monthly premium to grow into a substantial nest egg. That cash infusion couldn't come at a better time either. Your children are probably ready to go to college soon, and it is time to start investing wisely for your retirement. You would have never thought that the small amount you paid monthly has now granted you the financial freedom you needed. If only you would have known then, what you know now.
by: Lance Thorington
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