When Is the Best Time to Apply for Life Insurance? | Financial Buzz

When Is the Best Time to Apply for Life Insurance?

Deciding to purchase life insurance is a big deal! The tool aims to help bridge the gap between the death of a person and the financial fallout that can happen as a result. Life insurance plays a key role in any healthy financial plan to protect loved ones and assets from worst-case scenarios. If you’re ready to purchase life insurance but aren’t sure if it’s the right time, this is everything you need to know about timing and life insurance.

Decide If You Need Life Insurance

The first step to deciding when to purchase life insurance is knowing if you need it or not. Understanding how life insurance works is super important to help you find that answer. In just about every case, life insurance is a valuable tool, but it may not be necessary for rare situations. 

The general rule of thumb is that you need a life insurance policy if you have any dependents who would suffer without your income or even your role in their life. So, whether you’re a stay-at-home parent who offers immeasurable value to the family, or you’re the caretaker for an older family member, you’ll want to factor in the value provided, even if not a direct dollar amount.

Life insurance policies are not exclusively applicable for families and those looking to support spouses and children. Life insurance can be used in any case where your death will equate to financial hardship. That can mean business partners who want to protect their business if a founder dies prematurely. Those funds can then be used to hire new help or keep the business afloat as the model is shifted.

For adults without dependents, life insurance can also help to cover debts. Whether you name a parent or sibling as a beneficiary or place the funds in a trust, you can have peace of mind in knowing that your debts will not harm your loved ones in your absence.

The Earlier, the Better

Once you’ve decided that life insurance is right for you, the next step is determining when the best time is to purchase your policy. It probably doesn’t come as a surprise that, much like any other financial tools or investments, the sooner you can set it up – the better off you’ll be.

Life insurance policies are going to be much cheaper the younger and healthier you are. For example, an 18-year-old in good health will receive a much better rate than someone purchasing life insurance for the first time at 50 years old.

Why? Because health worsens over time. Whether naturally in elevated cholesterol and high blood pressure or customer provoked via a vice like smoking cigarettes, you present more of a risk as you grow older. To help offset these risks, you can expect an insurance premium to be higher.

Skip the hassle and excess fees, and shop early for your life insurance policy. The healthier you are, the better your rates will be, which can make all the difference.

The Bottom Line

Life insurance is an excellent tool for people of all ages, but there are better times than others to purchase. After you’ve decided that life insurance is right for you, the best next step is to look into providers and plan types to decide which is best for you. From there, adopting a policy early on can mean better savings and greater value than whole policies with growing cash value.

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