When Should You Take Out Life Insurance?

Life insurance is often associated with growing older, as we anticipate potential health issues down the road. Yet did you know life insurance premiums actually increase with age? As such, those looking to support their family financially after death should think about when to take out a life insurance policy.

Start Younger

There is no “right” time to purchase life insurance. We take our own paths and have different experiences along the way. To determine the most advantageous time to take out a policy, consider these two factors:

  • Youth: Adults can obtain optimal life insurance rates in their 20s and 30s.
  • Responsibility: If you have a spouse or growing family, life insurance provides them financial support, from everyday expenses to paying for a funeral or handling outstanding debt.

While not everyone follows the same timeline, it’s generally recommended you take out life insurance when you get married or start a family to secure lower rates. Behind the reasoning not to wait:

  • Individuals who purchase life insurance in their 20s or 30s tend to qualify for lower rates, due to their youth and having fewer serious health conditions. After this point, premiums for an equivalent life insurance policy can double or more.
  • Due to age and the likelihood you’re already living with a preexisting condition, purchasing life insurance in your 40s, 50s or beyond becomes significantly harder. You’ll likely face higher premiums or find that more carriers reject you.
  • Life insurance tends to mirror retirement: The sooner you start saving, the more you’ll have later on!
  • You cannot anticipate what’s going to happen. Today, more adults have significant debt, from student loans to mortgages and credit cards. Even if you have not started a family yet, life insurance can assist your next of kin in the future to pay off any outstanding balances.

Types of Life Insurance Policy

Many adults tend to rely on employer-provided coverage during the younger years. While accessible and convenient, these life insurance policies end once your employment does and do not have the financial effect or support your loved ones will need.

Due to these factors, younger adults are advised to take out a life insurance policy that’s worth five to 10 times their annual income to protect their dependents.

However, timelines based on type of life insurance policy can vary:

  • Term Life: This policy has a set duration. Typically, term life is taken out to assist others dependent on your income. The amount is based on how long they will require support and the expenses they could be facing. For instance, paying off a mortgage taken out with a spouse or college tuition for a child.
  • Whole Life: The cash value of this policy grows over the years. Considering this progression – and what your loved ones could need in the future – you’re advised to start as early as possible to reap this benefit.

Are you thinking about taking out life insurance? Whether you’re exploring or have a definite timeline in mind, turn to the agents at HUB/Ion Insurance. To learn more, contact us today.