Graduation Means Preparing for the Future - Have You Purchased Life Insurance?

Graduating

If you’re headed toward graduation, life insurance may not be the first thing you think about as you leave college for the real world. There are so many things that cross your mind when you’re about to be on your own. Not only do you have to find a job, an apartment, and more - you also have to start paying your own bills and learning how to manage your finances. However, graduation is one of those times thinking about life insurance is a good thing to have at the top of your to do list. Life changes, or Pivotal Moments, give us an opportunity to realize that current insurance coverage might not meet your needs - or that a lack of coverage may need to be remedied. Life insurance isn’t just for established adults - it’s for everyone who has responsibilities such as a car payment, mortgage or student loans. Purchasing life insurance and being fully insured is a great way to secure your financial future.

As you enter the world of car payments and career changes, it’s probable that you don’t have life insurance. Your parents may have had a life insurance policy on your behalf, but as you graduate and enter the real world, it’s time to insure yourself. Just as you pay for your own car or health insurance, life insurance can be something you purchase as well. Sometimes, your employer or health insurance provider may provide a life insurance option, which is often a great start. However, even if you have a life insurance policy provided through your employer, additional life insurance is a great idea. After all, when it comes to life insurance, you want a safety net that is big enough for every need you and your future family might have. So really, as you build a life for yourself, there are several life insurance questions you can consider. For example, you’ll want to gather information about your current life insurance coverage, and if you don’t have coverage, you’ll want to consider if a life insurance policy is right for you. You may also want to take a look at any life insurance coverage you do have, whether it’s through your parents, your employer, or your health plan. Then, determine if you have enough life insurance coverage to take care of your financial responsibilities if something were to happen to you.

Just like you, your life insurance package will be unique. After all, do you need the same life insurance coverage as your downstairs neighbor, who owns her own business? Or do you need the same coverage as your college professor who has three children? The answer is, of course not. Each person’s life insurance need is different! So, as you consider what your life insurance needs are, you can work with a PivotCare team life insurance professional who understands your situation and your future plans. 

There are some basic elements of life insurance that are important for you to know. For example, there are two primary types of life insurance policies, and you can typically personalize each type of life insurance policy based on your needs. Permanent life insurance policies cover you from the time the policy is purchased until the end of the policyholder’s life, regardless of age. Term life insurance policies are usually less expensive than permanent life insurance policies, but term plans only cover a specific time period - for example, from purchase to age 65. Something to keep in mind for new college graduates is that term policies get increasingly more expensive with age, so most younger policyholders decide to purchase the longest term available to lock in the best monthly premium price possible.

The next thing to consider:  How much life insurance is right for you? As we have already mentioned, each person’s life insurance needs are unique. An industry rule of thumb you can consider as a baseline for your situation is that you should purchase enough life insurance to replace five to seven years of your salary at a minimum. However, you may have other financial obligations you’re responsible for - such as the purchase of a new car or your first home. So, if your goal is for your family to have no financial concerns if something were to happen to you, you’ll want to consult with a PivotCare team life insurance professional to determine the coverage that’s right for you.

Many recent graduates may think that because they’re on a tight budget, life insurance isn’t an affordable option. It may sounds cliché, but you can’t afford not to be covered. Securing your financial future is something that can never be put on the back burner. Plus, the younger you are when you buy your life insurance policy, the more affordable it often is. So waiting to make an important financial decision such as purchasing life insurance could cost you. Don’t make a costly mistake by waiting to consider life insurance coverage. Investigating life insurance options now will likely surprise you with how affordable being covered can be.

Before buying any life insurance policy, research the company you’re considering purchasing your policy from. Life insurance can be an emotional decision, but it’s also a business transaction. You should work with a reliable company that has a track record of offering the best for their policyholders. One thing you can do to be certain you’re working with a reputable firm is to check rating agencies such as Standard and Poor’s and A.M. Best, which rate insurance companies regarding their claims paying abilities. After all, there’s more to life insurance coverage than just having the best price. You want your life insurance company to be there for you for the long term.

Most importantly, when you consider the specific life insurance coverage that’s right for you, work with a life insurance professional who you can trust, and who gets what you want out of life. Life insurance may be a serious decision, and it can intimidate people too - but it shouldn’t! 

About the author:  Michele Cleary has been in the business for over 35 years and holds a CLTC designation. She believes that life insurance can give you and your family peace of mind, especially when you have other things to worry about. Michele now has 4 grown children and knows that proper planning is essential. You can reach her at 1-800-651-1953 or MCleary@Pivot.com.