When deciding to buy life insurance, it can feel a bit morbid but doesn’t mean that you shouldn’t think about it.
Unexpected and accidental death happens all the time. In fact, death caused by unintentional injury is the fourth leading cause of death in the United States, according to the Centers for Disease Control and Prevention. To add fuel to the fire, this accidental death rate is climbing. More and more Americans are dying each year due to overdoses and unintentional poisonings—up 78% over the past decade.
Some of these accidental deaths occur in older adults or the elderly. Many of them happen unexpectedly in young people who may be newlywed or have just started a family.
With these uncomfortable statistics clanging around in your brain, you’re probably searching for some source of comfort. So let’s talk about the security that we all need—life insurance.
When should you absolutely purchase it with no exceptions?
How do I know it is truly the best time to buy life insurance?
When You Should Buy—No Exceptions.
In some cases, there’s no question about whether or not you need to buy life insurance.
To make it simple, ask yourself a single question:
“Who depends on me?”
Life insurance is all about having a safety net for those left behind if something were to happen to you. Consider, for example, your children, your spouse, or other individuals and family members who may depend on you and your income to live comfortably.
There are two life events when you absolutely should buy life insurance:
- Gettting married.
- You are planning a family or if you already have a child or children.
In both circumstances, you are making commitments to expand your family and therefore the number of people who rely on you. 70% of households in the United States would have difficulty with their daily living expenses if the household’s primary breadwinner passed away. When you buy life insurance it ensures that:
- A form of income replacement exists for your family to cover daily living expenses and continue to live comfortably when you’re no longer able to provide a regular source of income.
- When you are gone, mortgage payments are covered so that your loved ones don’t lose the cherished memories of their home and aren’t forced to move.
- You can leave behind at least a small inheritance to your heirs.
The good news is, shopping for life insurance quotes is 100% free.
Other Good Times to Buy Life Insurance
It can be argued that life insurance is always helpful, but some circumstances in particular make it useful to have around. Life insurance is also recommended when:
- You are beginning to accrue debts such as student loans or credit card debt. If you’re in debt, the last thing you’re thinking about is bringing more bills and expenses into your life. However, debt won’t pay itself, especially not when you’re no longer around to pay it. Having life insurance assures that your constituents won’t be burdened by any debts you leave behind.
- You want to pay for your own funeral. I know—yikes! Unfortunately, the average funeral isn’t cheap, and it can run your family over seven thousand dollars on average.
- You are worth a lot of money. With wealth and success comes additional expenses such as estate taxes and inheritance taxes, both of which will be the responsibility of those who inherit your money and assets when you die. Life insurance can help your heirs to cover these costs.
The Surprisingly Optimal Age to Purchase Life Insurance
It may surprise you that the best age to buy life insurance is actually immediately after birth. No, no, we’re not recommending that an infant brush up on its investing skills. However, it’s important to know that life insurance is age-banded if you are planning on having children in the near future, are an expecting parent, or have a young one who’s not already insured.
In other words, life insurance becomes more expensive as each year passes, making it the most affordable immediately after birth. For example, choosing a whole life insurance policy means that you can “prepay” with a lump sum that is transferred to the child once they turn 18. The initial investment can begin to accrue some serious value over the years since this prepayment is tax-deferred and the insurance cost is fixed from the start of the policy.
Additionally, shopping for life insurance is a lot different compared to health insurance. This is especially true after all the new health insurance changes in 2019.
Some Final Words—Don’t Wait
There’s no way around the fact that life is unpredictable, which is why life insurance helps to instill some peace of mind in those who purchase it. However, it can be frustrating and difficult to accept your own mortality and invest further money into the future when you’re young or already struggling to pay bills. Still, our final word of advice is to act sooner rather than later. Even if you choose not to buy life insurance at some of the prime times we’ve listed above, it’s never too late to change your mind. Remember, you’ll save money in the long run. We promise.