Many people put off a discussion over purchasing life insurance because they don't want to talk about how situations would be when they are gone. But life insurance is a core component in almost any financial plan. So, what is the right age to buy life insurance coverage for you?
The best age for life insurance depends on family and financial circumstances and varies from person to person. Generally, if other people depend on your income or if you have debt that will continue after your death, you need life insurance.
Before applying for life insurance, it's essential to bear in mind that you should be eligible for it. When you're young and healthy, you can basically "ensure your insurability" Read on to learn more about how starting young will also give you more advantages when applying for life insurance.
The Younger, The Better
There is no right age when taking out a life insurance policy. However, most experts would say the sooner or younger, the better, for it becomes more expensive with each passing year. Younger policyholders can lock in lower premiums than older individuals.
As you grow older, you can have health conditions or problems that make premiums more costly or can disqualify you from buying a plan. Of course, you wouldn't want to put off purchasing life insurance when you get diagnosed with a sickness that could make you uninsurable.
For some, it does not necessarily follow that every 25-year-old should run out and be frantic on how to get insurance. From a practical and financial point of view, it just doesn't make sense if you don't have dependents yet.
Some people believe that you'll only need life insurance because someone else will endure financial hardship upon your passing. However, missing out on life insurance transactions at a young age has a huge economic effect, almost like delaying retirement savings.
What If I Don't Have Dependents?
Even if you are young and have no children or a financially reliant partner, a life insurance policy - even a basic one like a term life policy - can come in handy. This is because most life insurance plans offer coverage for lifelong disability; others also compensate for severe conditions.
This is the best choice if you don't have an unlimited supply of money (and we are assuming that you don't) because it can cover you financially if you are left disabled and not fit to work. In this case, you may consider your policy as risk management or a protection tool.
As described earlier, it is better to purchase a life insurance policy while you're younger because of the lower costs, irrespective of the type of plan. If you choose a term life insurance, you might lock in lower prices over a prolonged period (over the term) and save a lot of money.
Alternatively, whether you select a whole life, cash interest policy, or investment-linked plan, you will build a retirement component (or investment profit) over time. If you buy a plan earlier in life, this figure can grow to be more substantial.
Conclusion
Indeed, there is no fixed age to get life insurance, but the right time could be when you are able to afford at least a basic plan. When choosing an insurance plan, it is vital to consider affordability, especially with life insurance, because, more often than not, it is a long-term commitment.
You can probably look at a life insurance package while you're financially able – particularly if you have dependents. After all, the correct time to take a policy out is when you need it and before it's too late.
