Could’ve, Should’ve, Would’ve…
So, when is the right time to buy life insurance? Certainly, it must be when a person starts to have a family, takes out a big loan, or gets a big raise that a lifestyle depends on. Wrong. Unfortunately, the best time to buy life insurance is almost universally yesterday, last week, last month or last year. People often overestimate the cost of coverage, become uncomfortable planning for their own departure, and unintentionally set-up the conditions for financial disaster should the inevitable occur.
Life insurance is very simple. Certain products bring in more complicated features, but in essence a person pays money to an insurance company. If that person passes away during the policy period the life insurance carrier pays a designated beneficiary a pre-determined amount of money. This death benefit is often critical for a surviving family. It guarantees their quality of LIFE: Loans can be repaid. Income from the departed is replaced. Final expenses are covered. Education can be obtained to increase a survivor’s earning potential.
The pricing for this invaluable kind of protection is heavily influenced by age. That means that a healthy 25 year old may be able to get a large amount of coverage for extremely low rates. Sometimes policies can be as low as $10.00 per month. If that same person remains healthy but waits until age 40 the cost of the same insurance can easily triple or more. The earlier coverage is purchased the more economical it is.
Needs will change over the span of a lifetime, so while getting coverage early is key it is very important to review your policy with your agent at least every few years. Increasing income, a growing family, and other factors will dictate how much insurance makes sense. The best part is that many products include tax-free cash accumulation – universal life – that can be rather useful during some of life’s unplanned situations.
Life insurance is an appropriate product for all ages. It can be used to set infants up to have a pot of accessible cash later in life and to protect family interests. Life insurance is also appropriate for teens; especially true when they start driving. It is still very affordable for young adults and if they even think they may get married, have a family or take on debts in their lifetime it is all but a necessity. Life insurance is critical for middle aged adults with many responsibilities. Proper planning allows for financial stability among emotional angst should the worst occur.
The most painful answer to the question of when was the best time to buy life insurance is when the surviving family of a lost loved one responds, “Yesterday.”