If You Do One Thing With Your Money in 2024, Do This

The start of a new year is a popular time to make a financial plan. And yours might include opening a brokerage account so you can invest, or putting some cash into a CD to take advantage of today's competitive rates.

These are both sound financial choices. But if you don't yet have life insurance, and you have a family who depends on you financially, then putting a policy in place should absolutely take priority.

Why you can't afford to wait on life insurance

If you're fairly young, you might tell yourself that life insurance isn't something you need right away. But that line of thinking is flawed for one big reason.

The whole purpose of life insurance is to protect your loved ones if something extreme happens and you pass away unexpectedly. While being young might put you at less of a risk for certain health conditions, it won't necessarily mean that you won't get hit by a bus or get attacked by a criminal if you're in the wrong place at the wrong time.

That's why life insurance is something you really should not put off. It's not just your health you have to worry about -- it's circumstances.

To be clear, this doesn't mean you should walk around in perpetual fear of something bad happening. Quite the contrary -- putting life insurance in place should give you the peace of mind that your loved ones are protected financially if something occurs.

Also, you should know that the younger you are when you apply for a life insurance policy, the less expensive your premiums might end up being. Dave Ramsey says that for a $1 million, 25-year term life insurance policy, the average cost for a 30-year-old nonsmoker is $63.50 a month. For a 36-year-old applicant, it's $81.50 a month. And for an applicant aged 42, the monthly cost, on average, is $132.50. Term life insurance is typically the simplest and most affordable life insurance to buy.

The rate you're quoted for life insurance might look very different -- in a good or bad way. The point, however, is that the younger you are at the time of your application, the less expensive life insurance is likely to be for you.

Shop around for the best rate

Ideally, at this point, you're convinced it's a good idea to look into getting life insurance in 2024. But one thing you don't want to do is rush the process and sign up for the first policy you're approved for. 

Rather, shop around for life insurance, because you never know when one policy might be more affordable than another for the same amount of coverage. And if you're not sure how much insurance coverage you need, a basic rule is to multiply your current salary by 10 and add in any major debts you and a family member are jointly responsible for.

For example, let's say you earn $60,000 a year and have a $200,000 mortgage loan with your spouse. In that case, you may want to aim for $800,000 of coverage, at least as a starting point.

Of course, if you can't afford the amount of coverage you want, it could make sense to get a smaller policy for now and then aim to buy more life insurance once your financial situation allows for it. The key, however, is to try to put some coverage in place as soon as possible if there are people in your life who depend on you financially.