When Is It a Good Time to Buy Life Insurance?

When Is It a Good Time to Buy Life Insurance?

It is not always easy to decide when is the best time to buy life insurance because there are many factors that need to be considered in that decision. With a little thought, though, and the right information, the decision about when to buy life insurance can be reduced to just a couple of things.

The Key Factor

The most important thing about when to buy life insurance is that none of us knows when we are going to die. While this might be a little gloomy, it is the truth, and means that at any moment any loved ones that we have that are counting on us for financial support, may suddenly end up with nothing but a large number of bills and the inability to continue living in the manner in which they are accustomed to.

In the event of your death, their future could become instantly uncertain when they have no way to pay the bills - including rent or mortgage payments, food, clothes, car payments and maintenance, health insurance, and so much more. In an instant it could all be gone. Life insurance can make a strong difference with much more pleasant and predictable results.

A Secondary Factor

Will your death mean that someone else could be left with a lot of your bills to pay? Even if you are single and young, it will still cost on average $10,000 to bury you. This figure does not include the cost of any medical bills that might be encountered prior to your death. There could be many medical bills from a car accident, an illness, or any number of other potential problems.

If you have bills not paid off yet, then buying life insurance to cover them is a good idea. This could include bills from a college education, a mortgage, a car, electronics or jewelry, or credit cards. This is especially important if you have a co-signor on any of these bills.

Another Important Consideration

Life insurance is very inexpensive when you are young. Most life insurance policies - both whole life and term insurance will lock you in at a specific rate. Whole life locks you in for the length of the policy and your rates will never change. Term life, however, locks your rate in for a period of years, or terms, which could be from 10 to 30 years.

Life Insurance Is Very Affordable While You Are Healthy

Not only does health insurance change with age, but it also changes as your quality of health changes. While you can always predict that you will grow older, you cannot anticipate what kind of health you will be in - say five years from now if you wait to buy your life insurance. It is possible to get certain illnesses, even if you do not have a family history or genetic reason to expect them, which could render you "uninsurable" by life insurance companies, or raise the rates so high that you can no longer afford them. Buying life insurance while you are healthy and not smoking or participating in dangerous hobbies or sports will enable you to get the most affordable life insurance rates possible.

Many times a term life insurance policy will guarantee renewability. This applies no matter what your health is at the time your first term life policy expires. While it does not guarantee low rates, it does guarantee that you can get more life insurance. On the other hand, if you become ill with certain illnesses and don't already have life insurance, you probably will not be able to get it at all.

When you go to buy life insurance there are three options you can buy: term life, whole life and Universal Life. While whole will be about three times as much as term life insurance, it lasts usually until age 110 or 120. Universal life is usually twice as much as term life insurance, but has many different variations and can act like whole life insurance and term life insurance and can also last until age 110 or 120. Universal life insurance can also be used to provide the insured with tax-free retirement. Term life insurance will also give you the most coverage for the best price and is usually best used in conjunction with a permanent life insurance plan.

To discuss what options are best for you, contact us today to schedule an appointment.