It’s Never Too Early to Consider Purchasing Life Insurance
When is the best time to purchase life insurance? Many people decide to compare life insurance policies after a life change introduces new responsibilities. Some common examples include buying a new home, getting married, welcoming a new baby, or planning retirement. In these cases, life insurance gives you a way to help safeguard your home and family.
Of course, significant life events don't come along very often. Some people may not experience all of them. Even if you're not facing one of these life changes at the moment, is it ever too early to buy life insurance?
Is it ever too soon to buy life insurance?
Life insurance companies consider age a primary factor when setting life insurance rates. According to Investopedia, premiums may go up at least five percent on every birthday.1 For many life policies, premiums will remain the same during the initial policy term period once its purchased.
Not only can buying life insurance when you're younger lock in lower rates, it may give you more choices. For instance:
- Younger people are less likely to have developed health conditions that make coverage more expensive or even difficult to qualify for.
- Some insurers may limit benefits or even issuance of some kinds of policies after a certain age.
With this in mind, many parents and grandparents buy life insurance as a gift for children and recent graduates. They're not planning to collect on the coverage but to provide the child with long-term protection at a lower rate.
What kind of life insurance should younger people consider buying?
The best kind of life insurance to buy will depend upon your unique situation. For instance:
- Term life insurance: Term life insurance generally costs the least, so it's a good choice for buying large amounts of coverage. For some examples, people generally buy term life insurance when they want to cover a home mortgage or provide income for their spouse and children. Premiums will increase after the guarantee period or each renewal period.
- Whole and universal life insurance: Permanent policies never expire as long as you pay sufficient premiums. Over time, they may grow a cash value that can turn into an asset that people can rely upon while they're still alive. They're used for providing lifetime protection, transferring wealth to the next generation, and in some cases, even for building an asset that can be cashed in or borrowed against.
Here are some articles to help:
It's Never Too Early to Consider Life Insurance
From providing a child with the gift of lifetime protection to passing wealth to the next generation, few families ever regret buying the right kind of life insurance for their unique needs and stage in life. Buying early offers a chance to enjoy lower premiums and more years of protection.
This blog is up to date as of July 2021 and has not been updated for changes in the law, administration or current events.