You might not be aware that your life insurance policy can help you achieve your retirement dream. Even though this might sound unbelievable, it is certainly possible. We have outlined the strategies you need to take to ensure that your life insurance becomes a part of your retirement planning.
Purchase term life insurance
If you want a cost-effective life insurance policy that provides adequate coverage for your family, then you should buy term life insurance. In the event that you retire or die, term life insurance will provide your loved ones with enough financial aid to meet their needs. Also, unlike other types of life insurance, term life insurance low premiums allows you to put your money in other ventures that could yield maximum returns during your retirement.
Build an emergency account
Since you are paying extremely low fees on your life insurance policy, you can use part of your savings to create an emergency fund. Your emergency account can protect you from acquiring extra debt during difficult financial moments. We recommend that your emergency account should have 3-6 months of expenditure.
Buy long-term disability insurance
While saving for an emergency fund, you should also be investing in a disability insurance. With your disability insurance, you or your family will not have to live below your standard of living once you are unable to work. The reason is that a disability insurance replaces a large portion of your working income. Before selecting a disability insurance, we advise that you choose the one with a non-cancelable plan and a guaranteed renewable policy. Doing this would keep you from worrying about restarting your policy in case it expires. Besides, disability insurance with this type of features do not increase their premiums.
Invest the remainder
After you have done the above, you should invest the rest of your money in your choice portfolios. For you it could be stocks, bonds, money market securities, treasury bills, mutual funds or whatever catches your fancy.