When is the Optimal Time for Life Insurance?
When determining the right time to purchase life insurance, it is an essential aspect of your finances that could affect you and those close to you indefinitely. Consider these key factors when figuring out the best time to get life insurance
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When You’re Young and Healthy
Youth and Health=Lower Premiums: Life insurance companies love people who are young, healthy. This is because insurers see those who are younger as a lesser risk to insure, which equates with lower rates.
Savings in the Long Term: You may pay less over the life of a policy by securing a lower premium while you’re younger.
Higher Approval Odds: Coverage is more likely be approved with less stringent medical exams for those who are younger and generally in better health.
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After Major Life Events
In marriage: This is a big one; getting married typically leads to taking on new financial obligations, at least in our culture. If you die in income tax debt, the other part of this life insurance is to make sure your spouse is not financially screwed.
Birth of a Child — The moment you become a parent, it is imperative to think about how your family would economically survive if something bad happens and you are no longer there with them. Life insurance can help your child’s future needs, their education and living expenses.
Owning a Home: For most people, so is buying a home. If you have life insurance though, it can be used to make the mortgage payments for your family so they don’t lose their home when you are gone
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When Beginning a New Job or Business
Employer-Sponsored Plan: If you are about to start a new job and your employer provides life insurance, then it is the best way to increase in cover. But employer-backed insurance may not be enough by itself, so also think about an extra policy.
Ownership of a business: Life insurance can help to protect your business partners (so they are not forced into partnership with them) and provide capital to ensure that the business continues running. It is equally important for these types of circumstances that a company hold key person insurance_buffers.
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When You Have Debt
Debt Payoff: You can promise that your life insurance will pay off student loans, car notes, and credit card debt so the surviving spouse is not left holding these debts after you pass.
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Planning for Retirement
This cash value may allow you to borrow against your policy, or even use a portion of it as supplemental retirement income. Advisors can tap that cash value in retirement to provide extra income.
Estate Planning: Life insurance can be a valuable tool in estate planning, offsetting certain taxes and leaving your heirs with a legacy.
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When Rates are Favorable
Market Conditions: insurance rates may change due to market conditions or an updated in the industry. Keeping an eye on these, will enable you to identify a time when it is most feasible for you to avail the same at best prices.
Benefits of Starting Early
Lifelong security: Life insurance at an early age provides instant life-long protection to your dependents in case of premature death.
Peace of Mind: Having in place the right policy to protect your loved ones can provide peace of mind and focus on other areas of their lives, and on how best to manage them.
Cash Value Accumulation: The sooner you start, the more time your permanent life insurance policy has to accumulate cash value that could be put towards future financial needs.
1) Myth-busting around Timing
What Others Think They Can’t Carry Life Insurance — Yes, You Are Too Young for this Misunderstanding People often feel they’re too young to take out life insurance. The truth is that life insurance becomes more expensive and harder to get as you age, so why not consider looking right now.
Ex: “I Will Get It When I Am Old” – You will have to pay high premiums if you wait till your old, getting coverage could be difficault because of health factors.
Even if you do not currently have any dependents, taking out a policy now could secure lower rates and allow for financial flexibility in the future.
Conclusion
Life insurance is for the most part, something that many people do not start early enough. Whether you are single, in great health, early in your career or retired-buying life insurance now can benefit anyone. Before we get there however – remember that action now can help to protect your loved ones and provide you with a little financial peace of mind. With that said, you should take your particular situation into consideration and speak to a financial professional about the best time for when you should begin an life insurance policy.
