When you graduate from college, you don’t just dive into buying a mansion, right? You usually start by renting, and then once you’re settled in your career and family, you look for a home. The same idea applies to financial planning!
A good financial strategy balances both Term Life Insurance and Whole Life Insurance. Let’s break it down:
Get Your Term Life Insurance: Start by securing a solid Term Life policy to protect your loved ones, especially during those early earning years when you’re healthy (usually) and rates are low.
I recommend grabbing a 30-Year Level Premium Term Life Insurance. Look for a reputable carrier that lets you convert it to permanent life insurance without a medical exam later.
Consider Adding More Protection: Consider adding a Disability Waiver of Premium, too, so if you become unable to work, your policy stays active.
How Much Coverage Do You Need?: Aim for around $2,000,000 in coverage. I know that sounds like a lot, but trust me! When I got my first policy at 19, I was healthy and paid under $600 a year for a $1,000,000 policy. Fast forward about 17 years, and the value of that SAME $1,000,000 then, is not going to last very long! (luckily, I’ve converted part of it to a custom-pay Whole Life, which is a lifesaver now that my health isn’t what it used to be, that's for another post though).
Grow Into Permanent Life Insurance: Add Permanent Life Insurance to your mix as your income increases. This way, you’re not locked into high-premium policies when young but can still build wealth with tax advantages.
This blend of Term and Whole Life insurance gives you solid coverage now and lays the groundwork for future financial security without overwhelming upfront costs.
Stay tuned for my next post, where I’ll dive deeper into why this approach is so essential!