Is there a Right Time to Purchase Life Insurance?

When it comes to making use of your money, life insurance is often the last thing on your mind. The truth is that most people dread purchasing life insurance. These kinds of policies carry an uncomfortable connotation: best-case scenario, life insurance is just one more bill you pay, but the worst-case scenario is that you’re dead and your family is collecting the benefits. Regardless of how you look at it, life insurance will become a necessity all through the different stages of your life. Here’s why:

When you’re 25 to 35:

This is a critical time to get life insurance. At this stage, young adults are building out their life assets. This requires heavy expenses like the house mortgage, car payments, kids’ college fund, and retirement planning. Considering this is still so early on in your career, you likely still lack the financial stability to cover a major loss. That is where life insurance comes in.

For example, if you’re 30 years old and healthy, you can get a $500,000 term life policy that’s good for 30 years and pays an affordable monthly premium. As John Hauserman, a Certified Financial Planner from RetirementQuest, says, “For young people, term insurance is a very cheap and a very cost-effective way to take away risk.”

When you’re 35 to 55:

The time between 35 and 55 years of age is also known as your pre-retirement years. Right around this time, people start to see their liabilities shrink while their assets grow, assuming that people have been financially responsible and have followed some kind of financial plan, of course. The decrease in liabilities may mean that there’s no need for life insurance, but that’s not necessarily true. Some people may purchase a second home, may have or adopt more children later in their careers, or might even have to provide financial support for their grandchildren. These are just a few of the many examples of unexpected costly expenses you can still encounter during this stage in life, hence omitting life insurance is not really viable; you and your family can still benefit from protection.

When you’re 55 +:

When you reach this age, your biggest financial risk stops being death. Your kids are grown and have jobs, the house is paid, and most expenses have considerably dropped. Yet, one must still keep in mind the possibility of future medical expenses. These costs can easily rack up and become a liability for your family if something were to happen to you. For instance, consumers can switch from a life insurance policy to a long-term care policy, thus protecting themselves from the costs of a prolonged period of assisted living.

Life insurance doesn’t have to be complicated. As you can see, the earlier you purchase it, the more options you’ll have in terms of picking the right policy, and moreover, the more benefits you will be able to earn. So stop avoiding it, and get the financial protection you and your family deserve.