Every year, we hear the same question “when should I buy life insurance?”
It’s vital that you have life insurance when you need it, but you can’t predict the future, so how are you supposed to decide when to get life insurance.
Below we’ll show you the most common times people get life insurance, and what you should consider when making this important decision.
- 5 Times that People Buy Life Insurance
- How to Decide When You Should Get Life Insurance
- Getting The Most Affordable Life Insurance Policy
5 Times that People Buy Life Insurance
Most people put off buying life insurance until there is a triggering effect. The most common triggers are:
- Marriage or divorce
- Pregnancy or the birth of a child
- New job
- Moving or the purchase of a new home
- Loss of a loved one
#1 – Any change in Marital Status
When a couple decides to marry, they are planning a future together and obviously want to ensure that should either one of them die or become totally incapacitated, their spouse and any resulting children would be adequately provided for.
The other side of the coin is the fact that, were the marriage to break down and result in divorce, if there were children involved, Life Insurance would be a requirement of the divorce decree.
#2 – Being Pregnant or the Birth of a Child
Finding out that you are to become a parent, or indeed have recently become one, is a very powerful motivation to ensure you have adequate life insurance. This is an event which really forces you to focus on your life and to think about how your loved ones would cope without your financial support. You need to know that your child will be adequately provided for financially in the sad event of loss of either, or even both parents.
#3 – Change of Job
When you change your job, it can increase the demands on your life in general and it can also be a vital time to look at life insurance coverage. Your previous employment may have included Life Insurance as part of the package and this would have been terminated when you stopped working there.
Also, you may be working in a different area or even a completely different type of job which required a higher level of life coverage. Obviously you would need to reassess your lifestyle and ensure that you had enough life insurance to adequately meet your current needs.
#4 – Change of Address or New Mortgage
When buying a new house, it is essential to have adequate life insurance to ensure the mortgage will be paid off in the event of untimely death, or permanent incapacity. Many mortgage companies actually offer their own life insurance for this; however it can be vastly overpriced and is not necessarily tailored to the individual’s needs. It is better to look for life insurance that can be specifically tailored to your personal needs and budget.
#5 – Death of a Loved One
It is sad, but the death of a loved one can be the absolute motivator for people to think about life insurance. This is the time when people really realize the impact the loss of a loved one can have on their lives as it is the time when finances are most at risk and also when they create the biggest burden to the ones left behind.
It is hard enough to cope with the loss of possibly the most important person in your life without having the added burden of having to worry about your finances as well.
How to Decide When You Should Get Life Insurance
So when should YOU buy life insurance?
If you’re asking yourself this question and reading this article, something has got you thinking about life insurance. Here is what you should know when making the decision of whether or not to purchase life insurance.
The Younger You Are, The Cheaper Life Insurance Will Be
Every year that goes by, the cost of life insurance goes up due to your age. Also, with the current market volatility, life insurers are required to keep higher reserves and therefore life insurance rates keep rising. With both of these factors it’s safe to say, the longer you wait, the more you’ll pay.
The biggest factor that goes into calculating your insurance premiums is your age. Applying for life insurance now could save you hundreds, or even thousands of dollars every year on your policy. Even if you don’t need life insurance right this moment, it’s a good idea to buy it a couple of years earlier to save the money on the premiums instead of waiting and paying more later.
For example, let’s say that you don’t have any debt right now, but you plan on buying a home in the next year or two. While you have very little life insurance need right now, in two or three years, you’ll pay more for your coverage. You can save money on your policy by applying now instead of waiting. So no matter if you are needing insurance for yourself or a life insurance policy on your parents, it’s always cheaper to apply sooner.
If People Depend on Your Income, Get Life Insurance
If you have children or a partner who depends on your income, then life insurance is the best way to ensure they are protected financially if something happened to you.
People in this situation, especially with younger children, typically should purchase a term life insurance policy. Make sure the term lasts until they no longer depend on you financially.
Also, purchase enough coverage to keep them protected from any financial distress if you pass away. If your policy doesn’t have enough coverage, your family members are going to have to dip into their savings account.
Buy Life Insurance Before You Have Health Problems
Tomorrow’s health is guaranteed to no one. You need to qualify medically for a life insurance policy.
For most people, their health won’t get them rejected. The insurance company wants to look for any serious health problems.
Many people wait until their health declines to buy life insurance. This is not a good idea, because you will end up paying a much higher cost for life insurance.
Don’t wait until your health declines and it becomes unaffordable or worse, unobtainable.
Getting The Most Affordable Life Insurance Policy
Everybody wants to save money. Luckily, there are some key ways you can do this.
Here are some tips for saving:
- Compare multiple companies. Don’t take the first quote you see.
- Take the medical exam & stay healthy. If you’re healthy, the medical exam will help you save. Staying healthy by exercising, not smoking, and eating well will also ensure you get good rates.
- Work with an independent agent. Independent agents can do the shopping for you by comparing quotes from the best companies.
The easiest way to start is by using our quote tool. Then, give us a call and we can help you decide if now is the best time to buy life insurance, and which company and type of policy is right for you.