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Life Insurance at an Early Age
You may have read that you don’t need to buy life insurance
early in life. That’s not necessarily true. In fact, getting a
policy before midlife may prove wise. Relatively few people opt
for life insurance coverage between the ages of 18 and 45, yet
there are compelling reasons to get life insurance within this
window of time.
The key question.
Are you supporting individuals whose livelihood depends on your
income? If the answer is yes, it’s time to look at life
insurance.
Now, you may be saying: shouldn’t I wait to get a policy? Why
should I pay premiums when I have so many other checks to write?
Well, the reluctance is understandable: the perception is that
life insurance is for old people, and when you’re 30 or 35,
chances are you’ve got a long, great life ahead of you. But in
financial terms, here is why this can be advantageous.
You’ve got your health.
Typically, Americans shop for a life insurance policy in the
middle of their life spans – when they are in their forties or
fifties. At that time, they may have already fallen into the
grip of bad habits (smoking, obesity, heavy drinking) and
diabetes, heart disease, cancer or HIV may have entered their
health picture. All these conditions can jack up premiums or
make it harder to get a policy.
The cost
is relatively cheap.
Okay, maybe you won’t have to contend with any of the above
health risks at 45 or 50 – but who knows? Buying a term or
permanent life policy early in life, before you have to
encounter any of these problems, should allow you to pay less
expensive premiums. (Presuming you don’t face recurring risks to
your health and safety today.)
Did you
know that premiums for standard-risk term life insurance fell
50% between 1994 and 2007?1 Premiums have been
getting cheaper and cheaper for new term life policyholders,
partly because the mortality rate has dropped over the decades.
In fact, the non-profit Insurance Information Institute says
term insurance premiums have fallen by more than 4% per year
since 2000, and the premiums on cash value policies are
averaging roughly 5% lower today compared to a decade ago.1
Why would young singles need life insurance?
Good question. Some financial consultants will tell you there is
no pressing reason for it. Yet if you are single, buying a term
life policy (or even a permanent life policy) early on could
bring you a better deal and potentially guarantee your
insurability.
Maybe it’s time.
Time passes, things change, and so does your need for insurance.
Even if you are insured, it’s important to keep up with change –
as an example, the Insurance Information Institute estimates
that about a third of families don’t update their life insurance
coverage after a new baby comes home.2
If you’re young and you haven’t yet talked to a qualified
insurance advisor, think about doing so today – you may be
pleasantly surprised how affordable life insurance can be.
The above stated views should not be construed as investment
advice. highWAY Financial Networks does not provide tax or legal
advice. All information is believed to be from reliable sources;
however, we make no representation as to its completeness or
accuracy. The publisher is not engaged in rendering legal,
accounting or other professional services. If other expert
assistance is needed, the reader is advised to engage the
services of a competent professional. Please consult your
Financial Advisor for further information
Citations.
1
msnbc.msn.com/id/18926723/ [5/29/07]
2
registeredrep.com/wealthmanagement/insurance/people_living_longer_0819/ [8/19/08] |
