With the changing lifestyles and rising inflation, it has become necessary for every individual to develop a financial plan at an early stage. This plan should be able to meet your requirements at different stages of life. It is also necessary to find the right balance of investment instruments to meet different needs, such as protection, wealth creation, and savings.
Don’t make the rookie mistake of focusing on wealth creation alone. You must also add a life insurance policy to your financial portfolio to protect your family against life’s eventualities.
Importance Of Life Insurance
Many people do not think of a life insurance policy as an important investment decision until a major life event puts their family members at grave risk or when they meet with a financial crisis for emergencies.
Imagine if you are the sole breadwinner of your family and something happens to you? How will your kids afford education or your spouse pay for day-to-day expenses? However, when you are insured with the best life insurance plans, your family will be taken care of, even if you areno longer there to provide for them.
A life insurance policy helps in the accumulation of wealth, its preservation and also provide access to liquid cash when it is needed the most. Therefore, it is considered one of the most important components of financial planning.
If you are a first-time investor, then you are no stranger to the confusion that follows when you are looking at financial investment instruments. It is common to feel confused looking at confusing terms, such as bonds, stocks, etc. But a life insurance policy is simple and may even be considered the foundation of a solid investment plan. They are more affordable and cater to different stages of your life.
Let us discuss these stages in detail to know how to plan your investment portfolio and protect every stage of your life with a life insurance policy.
- Young Age
There are different types of life insurance that are suitable for people at different stages of life. For example, when you are young and single, you have fewer responsibilities and no dependents.
At this point, you can consider investing in a term plan insurance. This low-cost life insurance policy offers you maximum coverage at affordable premiums giving you access to quality life insurance that protects your loved ones. Young investors also enjoy lower premium because they have longer work years left and less probability of getting a life-threatening disease.
When you are married, it becomes necessary to invest in a life insurance policy. In case of a mishappening, the life cover will help your spouse stay financially secure. Even though you can choose the sum assured as per your requirements and financial condition, make sure it is inflation-adjusted and enough to pay for not just the expenses but also any liabilities.
- Married With Children
In this stage, you need to provide complete protection to yourself and your family. A life insurance policy along with a critical illness rider will help you pay for your treatment if you are diagnosed with life-threatening diseases.
At the same time, you can also get child plans that let you pay for your child’s education or marriage or both when they come of age. It is also a good time to add some retirement plans to the mix. This will help you have a stress-free retirement. Therefore, this is the right time to invest in some retirement plans.
- Elderly Couples
It is that stage of your life when your main source of income is savings and pension. You also incur high medical costs at this age. Therefore, consider investing in long-term insurances to stay protected and prepared for life’s eventualities.
Goals and financial needs keep continually evolving at every stage in our lives. This is why you need to protect yourself with a robust life insurance policy that provides financial stability to you and your family.
A life cover is not only necessary to safeguard the financial interests of your loved ones, but also gives you multiple other benefits, such as tax savings, developing a saving habit, wealth creation, etc. Each life insurance product brings different benefits to the table. Therefore, it is necessary to review your investments from time to time to ensure that all your life stages are adequately covered.
Irrespective of the phase of life you may be in, the key to having a good life is planning each stage carefully. We all have aspirations to protect our families and keep ourselves secure against unpredictable events. So, instead of overlooking this very important aspect of your life, you must review your financial requirements and make a pledge to stay protected.
If you are looking to invest in a life insurance policy, you can start by browsing websites of reliable insurers, compare plans, and only then make a decision. Besides, remember to read the policy guidelines and before making the investment.