When is the Right Time to Buy Life Insurance?
Buying life insurance is something that many people tend to push off, unnecessarily increasing its cost or even waiting until it is too late. People are afraid to talk about mortality and often feel that they are just wasting their money on life insurance. Unfortunately, the truth is many people leave their families with a significant amount of expenses that they cannot cover, and life insurance is there to protect them. So when is the right time to buy life insurance?
When asked about the perfect time to buy life insurance, the first thing most people think of is age. The truth with life insurance is simple: The older you get, the more likely you are to become ill and the higher your risk of mortality. As you age, your rates for life insurance will go up. The ideal time to buy life insurance is actually right after birth.
Policies can be locked in for significantly low rates for many years when your children are insured from a young age. But if you are here reading this, trying to find the answer for yourself, then that ship has likely already sailed. So that brings us to the next best answer: right now. While the ultimate time to buy life insurance in your adult life is your 20s, it is never too late. Secure a policy as soon as possible before you age into the next age category.
Debt is an important consideration when assessing the need for a life insurance policy as well as the value you will need to take out. As you accrue debt throughout your life, that debt becomes part of what is referred to as your estate in the event of your death. When most people hear the term estate, they think of assets and property, but it also includes debt.
When a loved one dies, their assets will be used to pay off the debt they have accumulated before any of their assets are disbursed to surviving members. If it is your spouse that passes, this could mean assets such as your cars and home are at risk of being liquidated if your spouse is unable to pay off the balance that is owed. It is crucial to protect your loved ones and make sure you have a policy that will cover all your debt so your family will not be left with a cost they cannot afford while dealing with the loss of a loved one.
Many new couples and families rely on a two-person income to support their lifestyles and provide the life they have always wanted. This means that if one spouse passes away unexpectedly, the family will be left in need. Sometimes the loss of one spouse's income is too much to overcome, and many families end up having to downsize or lose their family home. A life insurance policy can help cover the income that the spouse used to bring in, at least for several years, so the family has time to make adjustments to be able to accommodate the future lack of income.
When determining the value of a life insurance policy, it is important to make sure that it will cover the person's salary at least for a five-year period. If one spouse is a stay-at-home parent, also consider a life insurance policy to be able to compensate for childcare and other expenses that will need to be covered in their absence.
The fact is that the longer you wait to start your policy, the higher the rate of premium you will pay. But life insurance premiums are often very affordable. Just remember that a little money each month can give you the peace of mind that your family will be taken care of in the event of a tragedy.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.