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Should You Purchase Life Insurance if You Are in Debt?

If you are currently facing student loans, a high mortgage, car loans, or other forms of debt, purchasing life insurance is likely the last thing on your mind. By neglecting to face this important life step, however, you are setting yourself and your loved ones up for more complicated financial realities in the future. As cost of living continues to go up and the number of employers offering pension packages continues to go down, it is important that you safeguard your retirement. Purchasing a life insurance policy is part of this process. While it may seem like an unnecessary burden in the immediate future, it is sure to pay off as you age.

Purchase Life Insurance Now To Simplify Your Retirement

If debt and daily living costs encompass the entirety of your financial priorities, you are probably not building a retirement fund. Look at your spending budget and see if you can find room to purchase a life insurance policy. You should also speak with your employer to see if they offer retirement fund matching plans in addition to your 401K. Again, while it may be difficult to manage, adding a life insurance plan will prevent this stress later on. 

Make The Future Easier On Your Loved Ones

When someone passes away, their remaining debt is handled by their estate. This means that the person's executor will do whatever is necessary to pay off the debt. This could include selling valuable objects and property. While policies vary depending on the specific type of debt, sometimes creditors won't have a solution if your executor runs out of options. In cases such as mortgage payments, however, the debt falls onto the living spouse. This situation creates a potentially significant financial burden for your loved ones. While 55% of Americans said in 2015 that they would recommend life insurance to someone they know, this number jumped to 66% in 2016. This 11% increase suggests that more people are recognizing the importance of insurance, despite increased cost of living. Speak to your insurance agent about adding life insurance into your plan and about how you can better handle it financially.
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