Last week, I received a present at work. Not a gift basket or flowers, but a gift I bought for myself. While it won’t be immediately gratifying, this gift will bring me peace of mind for the rest of my life. What was the gift, you ask? My life insurance policy.
As a 23-year-old trying desperately to be a fiscally responsible adult (as long as Target doesn’t come to Vermont I might actually succeed), I’m realizing more and more how giant the umbrella of finances really is. It seems too scary and overwhelming to think about something like retirement right now, which helps explain why just 39% of millennials had a retirement account in 2013, according to a recent BankRate survey. What’s scarier for me? Realizing that if I don’t set up my retirement accounts now, there will not be any retirement…..which brings me to why I decided to buy life insurance.
Why buy life insurance? I’m not married and I don’t have any children or other dependents. I don’t need a death benefit for anyone. But, I do have student loans and a car loan and wouldn’t want to burden my mom with those in the event that I’m not around to finish paying those off.
So I made the decision to sit down with a financial professional and the fundamental question was answered: What could I get out of this while I’m alive? As it so happens, quite a lot. It just so happens that my life insurance policy includes living benefits. These living benefits allow me to worry less. In the event I were to become seriously ill and couldn’t work to pay my bills anymore, living benefits would allow me to access the death benefit of my policy while I’m living.* When I reach retirement age, if I haven’t used any benefits from my policy, I have the potential to access the cash value using policy loans, withdrawals or riders to supplement my retirement income.** Ultimately, the most exciting piece for me is knowing that I’m adding to the cash value of my policy with every premium, and I can watch it grow over time. The best part? I’m not worrying so much anymore. Between this life insurance policy, my Roth IRA, and my 401k, I have set a solid financial foundation for myself and am on my way to having the protection I need, and retiring the way I want to.
Learn more about life insurance with living benefits.
*Living benefits are provided by optional Accelerated Benefit Riders. Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Riders are optional, may require additional premium and may not be available in all states or on all products. This is not a solicitation of any specific insurance policy.
Payment of Accelerated Benefits will reduce the Cash Value and Death Benefit otherwise payable under the policy. Receipt of Accelerated Benefits may be a taxable event and may affect your eligibility for public assistance programs. Please consult your personal tax advisor to determine the tax status of any benefits paid under this rider and with social service agencies concerning how receipt of such a payment will affect you.
**The ability of a life insurance contract to accumulate sufficient cash value to help supplement retirement income will be dependent upon the amount of extra premium paid into the policy, and the performance of the policy, and is not guaranteed. Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Surrender charges may reduce the policy’s cash value in early years.