Young, just married and dreaming big. First child. First home. Young families have lots to plan for. Planning for financial security should be high on their to-do lists.
And when planning for a financially secure future, young families should begin with their needs, including:
- You need to be sure your loved ones will be taken care of
- You need to save for your children’s education
- You need to build wealth for your retirement
Three key types of insurance offer the financial protection young families need – life, disability and critical illness insurance can be combined to deliver comprehensive coverage for whatever life brings.
Life insurance. Life insurance can be whole, universal, variable or term. Whole life builds savings and provides a death benefit. Universal life pays a death benefit and builds savings tied to interest rate changes. Variable life is investment oriented, varying in cost and benefit according to how the policy’s investments perform. Term life, which can be the least expensive life insurance for the young, has no savings component and provides protection for a specified period of time.
Disability insurance. Disability insurance is the only kind of insurance that provides protection for your income. If you became unable to work because of sickness or injury, how would you pay your bills? Disability insurance provides a bridge over times of trouble. This insurance can be designed to cover a significant portion of your monthly income (generally 60 percent) and benefits can be timed to begin according to need. Disability policies also can continue to pay benefits during rehabilitation, job retraining and part-time employment.
Critical illness insurance. Critical illness insurance pays a cash benefit to a policyholder diagnosed with one of several covered illnesses like cancer, heart attack or stroke. There’s no waiting period and – unlike traditional health insurance – a critical illness policy pays directly to the insured. It’s money you can use any way you want, right when you need it most.
Young families should periodically re-evaluate their insurance protection as their responsibilities change over time. Choose a financially strong insurer and an insurance sales professional who is committed to helping you make your dreams come true. The ultimate value of any policy depends on the company and the people behind it.
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