The Best Time to Get Life Insurance

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life insuranceThe thought of setting up a term life insurance policy doesn’t usually come mind unless you enter a stage of life where people are dependent on your income. Do you have a spouse or kids that rely on your income and/or would take on your debt if you died? Then NOW is the best time to get a life insurance policy. If you are single but plan to get married soon or if you are married and are thinking about having kids in the near future then I’d even recommend setting up your policy before people become dependent on you. In my situation, I am now a stay-at-home mom with the exception of teaching my nutrition class twice a month. Needless to say, both my 7-month daughter and I are reliant on my husband’s income which is why he set up a policy on top of the policy he gets through work. We decided that I should also get life insurance in the unfortunate event that if I died my husband would have to pay for childcare.

There are a lot of factors to consider when it comes to deciding if you need term life insurance, how much to get coverage for, or how long you want to be covered. If you do decide that you will eventually need a policy, let me offer three reasons as to why NOW is the best time to get term life insurance.

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Your work coverage probably doesn’t cover enough

My husband’s company covers a year’s salary at no cost to us. This may be enough if you are single and don’t have any kids but since I’m a nonworking spouse and we have a child and a mortgage, we would likely need more than a year’s coverage.

You are the youngest you’ll ever be

The younger you are, the cheaper a policy will be because you are a relatively low risk for the insurance company. As morbid as it sounds, each year you age brings you closer to death and the chances of the company having to pay out the policy increases. The premiums might not rise exponentially from year to year as you age but by the time you hit your 30’s or 40’s you can expect to pay much more than if you were in your 20’s. Now, if you are 30 and not married you may not even need life insurance but if you’ve been married for 10 years and have a couple of kids, your premium rises with every year you put it off.

You are the healthiest you’ll ever be

This one might not be true since some people change their habits and pursue a healthy lifestyle after years of unhealthy living. However, if you have even one incidence that would raise a red flag for an insurance company, you put yourself in a position to pay a higher premium when applying for a policy.

Take me for example: My husband and I are 27/26 years old, are in the normal body weight range and all of our labs are within normal limits. We are active, eat healthy, and don’t smoke. My husband has no other health factors to report when he applied for an insurance policy, so his premiums were the lowest cost available. During my pregnancy my doctor found that I have an irregular heart beat. This led to a bunch of tests since they wanted to make sure everything would be okay for the baby during pregnancy and labor. Having EKGs, echocardiograms, and treadmill stress tests on my health record raised a red flag for the life insurance company. I am asymptomatic and will only need annual follow ups since my extra heart beats seem to not cause any concern the cardiologists. The life insurance company approved me for a policy but the cost was 75% higher than the original quote I got when I inquired about a policy. I am now paying the same amount as my husband for my policy even though his policy is worth double what mine is worth.

If you have one, what made you decide to invest in a life insurance policy?

This post has been written by Jessica from BudgetForHealth.com.

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Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

12 Comments

  1. Is your family, left behind, responsible to “Take on your debt” when you die?????? Just curious. 🙂

    • The mortgage is in my husband’s and my name so if I pass then he still has the responsibility of paying it off. However, I don’t believe you take on a relatives debt if they die unless you were a consigner of a loan.
      Jessica @ Budget for Health recently posted..Whole30 Week 4 Update

  2. Wow – I wrote about the same topic today. Actually it was my experience buying term life insurance. It was a little uncomfortable…but totally worth the peace of mind of knowing my son will have the necessary finances should the worse happen.
    MomCents recently posted..4 Things to Know When Buying Term Life Insurance

  3. I just read your article. You did a great job walking through the process! It would have been helpful to read when we first started looking into it. It is crazy how many questions the medical practitioner asked. Thanks for commenting and linking back to this article from yours, I appreciate it!
    Jessica @ Budget for Health recently posted..Whole30 Week 4 Update

  4. Not a problem! Its a topic a lot of ppl are uncomfortable with and personally didn’t think abt it until my son was in the picture. If putting the info out there encourages someone else to go for it then its all worth it.
    MomCents recently posted..4 Things to Know When Buying Term Life Insurance

  5. I agree life insurance is very important for those who’s family depend on them. My husband bought a policy before we were married and was only enough to take care of funeral expenses. So even if you already have a policy, sometimes you need to go back and reevaluate it and make changes.
    Tennille recently posted..Baby Steps To Financial Freedom – Part Three

  6. You know you’re weird when… your parents get you life insurance as a 21st birthday present 🙂 That said, it + work insurance would definitely not be enough should we decide to have kids! For some friends of ours, they found it overwhelming how “underinsured” they were when they decided to have kids. (Not underinsured for being childless, but when you have kids, the cost is kind of front weighted, when your kid is 17, they will be able to fend for them self a lot sooner than if they are 2.)
    Anne @ Money Propeller recently posted..New Graduate Office Wardrobe Staples (Men)

  7. Don’t young people die? We may feel invincible when we are young but there is no guarantee that we will see another day. So, I like your idea of getting life insurance as soon as you start planning to join your life with another person. An often ignored reason why you should buy life insurance early is that you may catch an illness which makes it impossible to get life insurance. For example, people catch thyroid cancer in young ages. If it is diagnosed and treated early they can live another 20 or 30 years. But most companies would even look at insuring such person as soon as they hear cancer.
    Carree recently posted..When Is Comparison Shopping Worth Your Time?

    • It’s not a fun topic to think about but that is true; we can eat healthy and exercise all we want but we can’t outlive death and it doesn’t guarantee we won’t get some type of illness. Thanks for sharing, Carree.
      Jessica @ Budget for Health recently posted..I completed the Whole30 challenge


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