When is the Perfect Time to Buy Life Insurance?

Life insurance has interesting applications beyond protecting dependents and loved ones. It can be used as a savings tool, retirement investment, and even for charitable gift giving.

The best time to purchase a life insurance policy is as soon as possible. As individuals get older, life insurance becomes more expensive. It’s prudent to plan and get educated about the many uses of a life insurance policy. Here are some of the best times to buy life insurance:

As a Young Adult

It is difficult for those in their 20s to see the benefits of purchasing an insurance policy while they are young. To them it is just an added expense that may not show benefits for many decades. The younger you are when you purchase a policy, the better. Also, young adults tend to be healthier and qualify for lower rates.

Young people can use a life insurance policy to cover funeral expenses in the case of an untimely passing. It may also be useful if a young person cares for an elderly or disabled family member.

When Starting a Family

Individuals who are getting married and starting a family should consider a life insurance policy. One of the essential uses of life insurance involves protecting family members and loved ones.

By purchasing a life insurance policy when starting a family, there are two benefits:

  • Good rates if the person is still young and healthy
  • Financial protection for loved ones in case the policyholder dies

When Home Shopping

Many couples think more about mortgages, home insurance, and taxes when home buying. This is also a perfect time to think about life insurance. Securing a mortgage is the largest financial responsibility most people undertake. Home buyers can secure mortgage protection life insurance – a policy explicitly used for paying off a mortgage in the event of the insured’s death.

Such a policy gives the remaining family member peace of mind knowing the house is secure.

When Starting a New Job

When beginning a new job, life insurance may be part of the benefits package. Employer paid life insurance is a nice perk, but it is often not enough. For a greater level of protection, purchase an individual life insurance policy.

There are a couple of problems with solely relying on employer-paid group life insurance policies:

  • The policy doesn’t follow the individual when they leave the employee.
  • When you do leave your employer, you will end up paying higher rates for life insurance because the new policy will be at your attained age.

Charitable Gift Giving

One of the most affirming uses of life insurance is to secure for the financial well-being of another person. Individuals with no children or other typical beneficiaries may still enjoy acquiring a life insurance policy for a favorite charitable organization. Upon their passing, the organization receives the benefit of the policy. Such policies may have tax benefits as well for policyholders.

Estate Planning

Couples engaged in estate planning may wish to create an inheritance for their heirs. In such cases, life insurance may be helpful. Survivorship life insurance pays out to beneficiaries upon the passing of both policyholders. In a typical life insurance policy, one spouse dies, and the benefit is paid to the surviving spouse, survivorship policies, on the other hand, pay when both individuals have passed.

Purchasing such a policy can create an inheritance for loved ones and help secure life insurance for a couple where one may not be easily insurable due to age or health.

Dual Income Couples

There are several reasons dual income couples should consider life insurance. One of the first questions such couples should ask themselves is, if one spouse dies, could the surviving spouse maintain their current lifestyle? The answer for most dual-income households is probably not.

Working couples should have a serious discussion about their need for life insurance to secure their lifestyle. The sooner, the better as life insurance premium increase as couples age.

When Having A Child

Most parents easily understand the need for life insurance to protect the financial well-being of their dependents. But having a child may signal another use of a life insurance policy. Forward-thinking parents can secure a life insurance policy for their children. Such a policy can serve as an asset which the child can borrow from when purchasing a house or financing their education.

Final Thoughts

Life insurance should be considered not only during significant life events, such as marriage, buying a home or having children, but also when estate planning and creating personal financial portfolios.

Life insurance has many applications and uses. Policies can be designed to fit many needs. The sooner individuals learn about the many uses of life insurance, the sooner they can reap the benefits.

To learn more about the right time to buy life insurance, contact the professionals at at (850) 942-7760. Our licensed insurance experts will be happy to answer any questions you have.

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