3 questions to ask if you’re considering life insurance

Estate planning is one of the best ways to make sure you’re leaving a legacy of care and security behind for those you love most. But there’s more to it than trusts, real estate, and other assets—life insurance is a key component of building wealth.

In the short term, it ensures that financial plans are not derailed in the event of tragedy. And long-term, the earlier a policy is purchased, the more it will pay out as the years go by. 

As an estate planning tool, life insurance is an affordable way for younger investors to start building wealth early, to plan for a world where your loved ones will live on without you. Consider these three questions to know if the time is right.

Are you the primary wage earner?

Take a look at household income and expenses: What happens if you take your income out of the equation? Not only does that create a financial emergency, remember that the probate process to transfer an estate to its beneficiaries takes an average of 13 months. 

During this time, most assets are frozen until the estate is settled. A life insurance policy can be accessed quickly to provide a financial lifeline during this time.

Life insurance not only provides peace of mind, it allows your loved ones to keep other investments intact so that they can grow in value. 

Do you have children?

The birth of a child is a common time for families to invest in life insurance, for good reason. Parents understand that their children have needs that must be planned for, even in the most catastrophic circumstances. 

As mentioned, it is a crucial lifeline as the parent’s estate is settled. And for children, there may be additional priorities like funding their education, appointing a responsible guardian to manage the funds, and even setting up a scheduled payout to ensure children’s security well into adulthood.  

Do you have debt? 

Young families are often carrying a heavy debt load. Think: first-time homeowners that may still owe student loans or other forms of debt. 

Over years, the debt is less of a burden as it is paid down and as careers progress, bringing up salary—and often this is when people get serious about planning for retirement, or for the financial legacy they will leave behind.

But life insurance is a smart, affordable way to begin estate planning long before you’re fluent in language like compounding interest and revocable trusts. Younger people can typically afford to invest in life insurance early, when other investments may feel out of reach. 

As a first step toward building a solid financial picture and planning for the future, life insurance is the estate planning tool that is easy to understand and easy to access when tragedy strikes. Because it’s never too early to think about the legacy you want to leave behind.