I often come across the question “when is the best time for me to buy life insurance?” Well, that depends on you. I am going to tell you the facts, and show you the absolute best time to purchase life insurance. Ultimately, the decision is up to you. Consider the following when asking the question “when should you get life insurance?”
How Life Insurance Premiums Are Calculated
In answering that question, it’s important that one understands how life insurance is calculated, and understanding how different situations change the premiums.
Now I don’t mean to sound harsh in any way when I say this. But ultimately, when you purchase a life insurance policy you are placing a bet with the insurance company on when you will die.
“I’ll bet you that you won’t die until age 100” says the life insurance company. “And if you do, I’ll pay you $400,000! However, there is a catch. You have to pay me $25 per month for the length of this contract, or 10 years. What do ya say?”
“Deal!” says the customer.
Life insurance premiums are based off of statistical data and mortality tables. In other words, the life insurance company has data on how likely the average female age 25 is to pass away in the next “x” number of years. This data is based off of historic records of death rates for males and females based on their health condition and lifestyle. These statistics take into account if there are any health conditions, major surgeries, family history, medications, etc.
So if you were the life insurance company, as a person gets older, would you say they are more likely or less likely to die? More likely of course! That leads us to our next question, if you are more likely to die every day you get older, do you think your insurance premiums will go up or go down? UP!
Long story short, the absolute best time to purchase life insurance is YESTERDAY! Life insurance is on sale today, and prices are going up tomorrow! Literally.
Consider Potential Health Conditions
I think we can agree that we all know someone, or have met someone in our lives (if not many) who have some form of health condition such as diabetes, cancer, had a recent heart surgery, etc.
I bet that person never thought they would end up in the doc office having a conversation about their next chemo treatment. (Again, not to be harsh, but its reality). Are you willing to bet on your life and your family’s life that you don’t end up with a health condition next week? Because guess what, once you have that health condition, either your insurance premiums are going to be way too expensive to even consider, or no insurance company will even want to approve you for a policy.
When you buy life insurance today, you lock in your current health status. That means that whatever your health conditions are today, will determine the cost of your insurance today, and that cost will not change (with most policies, there are some policies however that allow you to pay less money today, and premiums increase over the years as you get older).
This also means that if you are in the best shape of your life, no health problems, active, clean as a whistle, you will get a great insurance rate today. Despite what happens thereafter, your premiums are set in stone. “Does that mean if I get cancer next week, and I’ve already been approved for a policy last week, that I’ve locked in my life insurance premiums and the company will still pay the death benefit amount?” Absolutely!
Not convinced yet? Read on…
Consider Your Family
It breaks my heart when someone passes away, and the next day I see that person’s family posting a fund raising account on gofundme.com because they can’t afford the funeral costs or don’t have the money to afford the left behind debt. Sadly, I’ve seen this far too many times.
Not to mention, I’m more than certain that the last thing the family wants to do is worry about finances and paying large bills during such a difficult time.
With proper preparation, you will ease the burdens of your posterity. Let’s face it, we will all pass away some day. (Again, I say that respectfully. But it’s the truth, despite how hard it is to accept).
So, when considering when to purchase life insurance, don’t forget your family and those closest to you.
You Insure Your Car…AND You’re House…But Not Your Life..?
I’m willing to bet you that you currently pay somewhere between $95 – $400+ per month for auto insurance. Then add on a homeowners insurance policy or a renters insurance, add another $25-$100+ per month for that. Really, you’ll insure your car AND your home before you’ll insure your family and your life?
I understand many cases money can be tight, and every dollar counts. Yeah auto insurance is required by law, and most cases homeowners insurance is required by the mortgage company. But by skipping a night out to dinner once per month, you would more than pay for a basic life insurance policy.
Are You Convinced Yet?
If you’re not convinced yet, I’m not sure what will convince you. I will say that life insurance is needed for 99% of all family situations. Some have funds to self-insure, or make more money in a day than I do in a year, but those are few and far between. If I had the funds to set aside and plan for the unexpected, I’d be writing a different article.
Protect your family and your loved ones, and get life insurance TODAY! The earlier you can purchase it, the better. And hey, if you’re not rich but have a good income, I go as far as to even purchasing it for my children, and even my unborn children (that’s right, some policies have this as an added benefit).
If you’d like to get a life insurance quote, I’d be happy to help, and guarantee that if I can’t find something that fits your situation, I know someone who can.