Blog

You Are Never Too Young to Buy Life Insurance

Life insurance is one of the most often-overlooked insurance products for two main reasons: Life insurance

  1. It is optional; unlike auto and homeowner insurance, there is no law or financing requirement to purchase life insurance.
  2. It is mostly a selfless product; the policyholder does not receive the death benefit, so the only way they can benefit is by utilizing the cash value of a permanent life insurance policy.

Despite these two factors, life insurance is a necessity for most people, and a large number of consumers who should be protecting their families against a worst case scenario go without it.

The question is often asked “when is a good time to buy life insurance?” While each individual circumstance varies, the general answer to this question is sooner rather than later. There are two good reasons to consider purchasing life insurance when you are younger:

  1. The Younger you are, the Cheaper the Policy: Because actuaries price life insurance policies based on life expectancy, age is always a factor in the rates.
  2. The Younger you are, the Healthier you tend to be: Another major factor in pricing life insurance is your health. When you are younger, you tend to have far fewer health issues and will usually be able to qualify for the most preferred rate based on a physical exam.

The Price of Waiting to Buy Life Insurance

Many ask why they should buy life insurance young when they could save the money and wait until they are older and need it more. This is a fair question. Aside from the fact that life is always uncertain and we could confront our mortality at any age, here is an example of what it may cost for life insurance at ages 25 and 35:

  • If you are 25 years old and healthy, you may be able to obtain a $500,000 30 year term life insurance policy for around $60 per month. This would cost you and your family about $720 per year.
  • If you are 35 years old and health, a 30 year term life policy might cost around $100 per month, or $1200 per year.

In this example, waiting 10 years could cost your family an extra $480 per year for the same level of coverage. And this is assumes you remain in good health. Should you develop even a chronic condition (such as high cholesterol), you would no longer qualify for the preferred rate and it would cost more for the same level of coverage.

When Should You Buy Life Insurance?

As mentioned earlier, every circumstance is different and everyone has unique needs. The best way to determine the right time for you to buy and how much to purchase is to speak with an independent insurance agent. Independent agents are not “captive” to a particular insurer, giving them the ability to shop freely among several of the top carriers in your state to find the policy that best fits your needs and budget.