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And it’s not too late to add it to your list.
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Now that 2023 has kicked into gear, you may be ready to start tackling some of your New Year’s resolutions. And several of those may be financial in nature.
You might, for example, have the goal of spending less money so you can add to your savings account balance. And you may be hoping that 2023 is the year you finally start setting money aside in a retirement fund, like an IRA account.
But there may be another important item to add to your list of New Year’s resolutions this year. It’s something that could provide the people you love the most with the financial protection they deserve.
Is buying life insurance on your list?
If you don’t have a life insurance policy in place already, then getting one should be a priority in 2023 if there are people in your life who depend on you financially, or stand to get hurt financially in the event of your passing.
Say you’re married with two kids and you’re the sole breadwinner in your family. How would your spouse and children manage their expenses if something were to happen to you?
Even if you don’t have kids or aren’t married, it could still pay to get life insurance if you support people financially. You may, for example, have a younger sibling in college who lives with you rent free during the school year. If you were to pass away and therefore stop paying rent or the mortgage on your home, would your sibling be able to keep up with that cost? Or would they have to scramble to find somewhere to live?
Life insurance is more affordable than you think
A big reason some people might hesitate to buy life insurance is that they’re worried about the cost involved. But actually, there’s an easy step you can take to keep your premiums costs down — buy term life insurance instead of whole life insurance.
Term life insurance will only cover you for a limited period of time, whereas whole life insurance will cover you for the rest of your life. Plus, term life insurance won’t accumulate a cash balance you can borrow against or cash out, whereas a whole life insurance policy could serve as a cash source for you if you need it.
But term life insurance is generally much less expensive than whole life insurance. And opting for a term life policy could spell the difference between being able to afford coverage or not.
If you’re worried about only having coverage for a limited period of time, keep in mind that many term life insurance policies are set up to last for 30 years. And that may be more than enough for you.
Let’s say you’re in your mid-30s with a spouse of the same age and two young kids. If you buy a 30-year term life policy, that coverage will be in place until your kids reach adulthood. And in 30 years, your spouse should be eligible to withdraw from their retirement savings penalty free and also start collecting Social Security. So if your coverage runs out at that point, it shouldn’t leave your loved ones in the lurch financially.
You may have a long list of New Year’s resolutions you’re looking to tackle in 2023. But if buying life insurance isn’t on that list, make a point to add it.
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