When to Purchase Life Insurance and Why
Did you know that you can purchase life insurance on a two-week-old infant with certain carriers? Let me share a story about a dear friend and her first grandson. My friend happens to be the CEO of our women owned company, and she’s been in the financial industry for over 20 years. When her grandson was born and as soon as he was eligible at two weeks old, the first gift she chose to give him was an Indexed Universal Life insurance policy that would grow tax free for him throughout his life – offering access to money to possibly fund his college goals, to purchase a vehicle or provide a downpayment to buy a home, etc. I have not been in the business as long as she, but when I learned of this, I immediately purchased policies for each of my children and my one grandchild.
As life would happen, several months after my friend's grandson was born, he was diagnosed with a hole in his heart and would require open heart surgery. He thankfully, survived and now thrives and is an active, healthy little boy ready to attend elementary school. Had my friend not taken out this policy, it is likely that her grandson would challenged to qualify for a policy of his own in the future. The point is there is no time too soon, and no life event that can’t sneak up on us.
All that to say that life insurance is a crucial financial tool that provides security and peace of mind to individuals and their loved ones. It serves as a protective shield, ensuring that the financial needs of beneficiaries are met in the event of an untimely demise.
While the importance of life insurance is widely recognized, many people wonder when is the right time to purchase it?
In this article, we will delve into the question of timing and explore the reasons why obtaining life insurance sooner rather than later is a prudent decision.
The Power of Time
The primary factor that influences the decision of when to purchase life insurance is time itself. Time is a valuable asset when it comes to securing life insurance coverage, as it affects the cost of premiums and the eligibility of the policyholder. Here are key reasons to consider purchasing life insurance at the earliest opportunity:
As soon as one assumes financial responsibilities, such as getting married, starting a family, or taking on a mortgage, it is advisable to obtain life insurance. Dependents and significant others rely on the financial stability and support of the primary income earner. Life insurance provides the future income that was lost to these dependants, ensuring they have the financial means to continue their standard of living while making a very large transition now that the primary income earner is gone. This financial security net gives the surviving spouse and family time to make plans and put those plans in place as they begin a new chapter in their lives.
Premiums for life insurance policies are primarily determined by the applicant's age and health condition. Younger individuals generally have better health and lower mortality risks, making them eligible for lower premium rates. By purchasing life insurance early, you can lock in lower premiums and potentially save substantial amounts over the life of the policy.
Insurability and Health Concerns:
As time passes, health conditions may develop, potentially leading to higher premiums or even disqualification from coverage. By obtaining life insurance when you are young and healthy, you can secure coverage regardless of future health changes. Once a policy is in place, it generally remains in effect even if health issues arise later on.
Accumulating Cash Value (my personal favorite):
Certain types of life insurance policies, such as whole life or universal life, can accrue cash value over time. The sooner you purchase such policies, the longer the cash value has to grow. This can serve as a valuable financial asset, providing access to funds through policy loans or withdrawals for future needs, such as education expenses or retirement planning.
Peace of Mind:
Life is unpredictable, and no one can foresee what lies ahead. By purchasing life insurance early, you establish a safety net for your loved ones, providing them with financial protection and stability if the unexpected occurs. This peace of mind allows you to focus on other aspects of life without the constant worry of leaving your family in a vulnerable position.
The decision of when to purchase life insurance is influenced by personal circumstances, but the general consensus is to obtain coverage as early as possible. By doing so, you can take advantage of lower premiums, secure insurability regardless of future health changes, and accumulate cash value over time. Moreover, life insurance provides a sense of security, ensuring that your loved ones are protected in the face of life's uncertainties.
Don't wait until it's too late – act now and provide financial stability for your future and the future of those you love.
Reach out to receive a free quote, consultation, or recommendation depending on your goals and needs at firstname.lastname@example.org or 775-365-9429.