When is the Right Time to Buy Life Insurance?

Life insurance is an important part of a comprehensive financial plan that prepares your entire family for the future, especially when you are married and/or have children. Buying life insurance is something that many people tend to push off until a point at which it becomes costly or is too late. People are afraid to talk about mortality and often feel that they are just wasting their money on life insurance. Unfortunately, the truth is many people leave their families with a significant amount of expenses that they cannot cover, and life insurance is there to protect them. So when is the right time to buy life insurance?

Age 

When asked when the perfect time to buy life insurance is, the first thing most people think of is age. The truth with life insurance is simple: the older you get, the more likely you are to become ill and the higher your risk of mortality, so as you age the cost for life insurance will go up. The ideal answer to what age is the best time to buy life insurance is actually right after you are born.

Policies can be locked in for significantly lower rates for many years when your children are insured from a young age. However, it's likely that if you are reading this and trying to find the answer for yourself, that ship has already sailed. That brings us to the next best answer which is right now. While the ultimate time to buy life insurance in your adult life is your 20's, it's never too late. Secure a policy as soon as possible before you age into the next age category. 

Debt Level

Debt is an important factor when deciding the need for a life insurance policy, as well as the value you will need to take out. As you accrue debt throughout your life., that debt becomes part of what is referred to as your estate in the event of your death. When most people hear the term estate, they think of assets and property, but it also includes debt.

When a loved one dies, their assets will be used to pay off the debt they have accumulated before any of it is disbursed to their survivors. If it's your spouse that passes, this could mean assets such as cars and even a home are at risk of being liquidated if your spouse is unable to pay off the balance that is owed. It is crucial to protect your loved ones and make sure you have a policy that will cover all of your debt so your family is not left with a cost they cannot afford while dealing with the loss of a loved one. 

Average Income

Many new couples and families rely on a two-person income to support their families and provide the life they have always wanted. This means that if one of the spouses passes away unexpectedly, the family will be left with a need. Sometimes the loss of one spouse's income is too much to overcome, and many families end up having to downsize or lose their family home. A life insurance policy can help cover the income that the spouse used to bring in at least for several years so that the family has time to make adjustments to be able to accommodate the future lack of income.

When determining the value of your life insurance policy, it is important to make sure that it will cover your salary at least for a five-year period.  If one spouse is a stay at home parent, you may want to consider a life insurance policy as well to be able to compensate for the childcare and other current recurring expenses. Additional considerations include paying for children's college education and other future expenses.

The fact is that the longer you wait to start your policy, the higher the rate of premium you will pay. Life insurance premiums are not as bad as you may think, and with a number of options of different policy types they can often be very affordable. Just remember that a little money each month can give you the peace of mind that your family will be taken care in the event of a tragedy.

If you would like help determining the right life insurance policy for your financial plan, feel free to...