Protecting Yourself Now Could Change Your Life

Why You Shouldn't Wait to Buy Life Insurance

by Alison Robb

Financial Frequency. mySecurity

September 13, 2019 .3 min read

Do any of these statements sound familiar?

 “Life insurance is too expensive.”

“I am not married or I don’t have kids so I don’t need life insurance yet.”

“I have all the time in the world to buy life insurance.”  

Unfortunately, this is a common misconception many younger people have.  After all, you are already buried in school loan debt, why would you want to add another monthly expense to your already tight budget? It’s a tough idea to sell, but life insurance, when purchased early, really can be one of the smartest decisions you can make.

To help explain the importance of life insurance and the benefits of buying it sooner rather than later, let’s go back to the basics by answering some of the most commonly asked questions.

1. What exactly is life insurance? 

Life insurance is a type of policy that will provide a predetermined lump sum of money to those designated as the beneficiaries should the insured die unexpectedly.  In simple terms, life insurance will make sure your loved ones are financially secure.

2. Why should I buy life insurance?

For many, life insurance isn’t purchased until a major life event happens like getting married, having kids, or buying a home because it’s easier to see the value at that point. But even if no one else is depending on your income and you die unexpectedly, you are still likely to leave behind bills, like  those hefty student loans, credit card balances and the cost of your funeral. These expenses could be an unnecessary burden on your parents or siblings at what would already be a very difficult time.

3. What’s the benefit of buying it when you are younger?

There are two very important reasons why you should consider purchasing life insurance when you are younger.  The first, and probably the biggest, is the cost. The younger you are the cheaper it is. Why? Because when it comes to pricing out the cost of life insurance, it’s assumed that the younger you are, the healthier you’ll be, which means there is less risk when it comes to issuing a policy. 

 Another important reason to buy life insurance when you are young and healthy is to protect your future insurability.  You don’t know what “future you” will look like. You may become sick or disabled and that would make it very difficult and very expensive to get coverage.  By purchasing life insurance early, you will have the option later on to convert your policy at the end of its term into a whole life policy without having to go through any of the underwriting that would normally take place, guaranteeing future coverage.

4. What’s in it for me?

We know the biggest benefit is the money that will go to your family if you die unexpectedly.  However, depending on the type of life insurance you purchase, there are other benefits you may find useful. For example, you can purchase a term life insurance policy that has a return of premium rider on it.  That means if you live to the end of your policy term, you get all your premiums back…tax-free! You can take that money and pay off some of those bills or if those are all paid off you can go on that amazing vacation you’ve been dreaming about. What you do with the money is all up to you.

You can also purchase a whole life policy.  This type of policy protects you for your entire life (as long as you pay your premium) and a portion of each premium you pay goes into an account called “cash value”.  The cash value builds tax-deferred and you can take loans out against it which can come in handy if you need money to help out with college loans or even wedding expenses. The younger you are when you buy a whole life insurance policy, the more time you will have to build up that cash value.

The bottom line and most important thing to remember about life insurance is, it’s really not about you.  It’s about them. It’s for the ones that mean the most to you. As Ferris Bueller once said “life moves pretty fast…”, so don’t wait.  It’s never too early to get the life insurance protection you and your loved ones deserve.

in this issue

  • safeguard your identity
  • date safe
  • cover your assets
  • protect yourself
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