What is the Best Time to Buy Life Insurance Policy?

When you are young and without a single worry in the world, the world seems to be your oyster. It is easy to not think about the unpredictability of life when you are young and free. Buying a life insurance policy seems like an unnecessary hassle to a lot of people in the younger generations.

Even when some of them do decide to buy a life cover, they do it simply to save during tax deductions and thus the benefits of a life insurance policy are often neglected by them. It makes sense because a lot of them are not shackled by familial responsibilities, unlike their parents and grandparents.

However, one must keep in mind that purchasing a life cover at different stages of your life can have different benefits and different impacts. The benefits earned by buying a life insurance plan at the age of 20 will be different from buying the same policy at the age of 40 and so on.

A life insurance policy acts like a safety net that catches you when you fall. It flips you back on your feet quickly after the fall. Believing that you would never fall is an optimistic outlook but not a very practical one. Life is full of unforeseeable surprises and shock, and as much as we wish that you never have to face an unfortunate event in your life, it always helps to prepare for the worst in advance. Life insurance plans provide a financial cushion not only for you but also for the people you dearly love in times of need.

Best time right to get a life insurance plan?

1. Starting Young

Buying a life insurance policy at a young age has its share of benefits. Age plays a major role in calculating the rate of premium. Since the insurance is compounded, it makes sense to start as early as possible. The younger you are, the lesser will be the rate for the term. So, begin investing when you can take advantage of the lower premium rates. Also, this is the time in an individual’s life where they don’t usually have a lot of responsibilities over their head and expenses are low.

The second advantage of buying a plan early is that younger people are fairly healthy and that once again contributes to lower premiums as well as might exclude any medical check-up that accompanies a life insurance application process. Health is a primary factor in calculating the cost of your overall coverage. As one grows older, the chances of developing a chronic illness like cancer, heart issues, diabetes, etc are significantly higher. Later in age, if you are diagnosed with such a disease, your coverage will be higher. On the other hand, if you are diagnosed with a terminal illness, you might not be able to apply for any kind of life insurance policy at all.

If you are in your early twenties and are unmarried, this is the best time to prepare a safety net of insurance as your expenses are scarce. A life insurance plan like term insurance is the best option for you since they are way more affordable than their counterparts and are a great way to save some tax apart from saving you a lot of extra cash that you might have to spend on higher premiums.

2. Major Life Changes

Getting a life insurance cover can depend on several other changes in your life like starting a new job, getting married, or getting divorced, buying a new house among other significant changes. These changes are the perfect indication for you to start considering your options of buying a life insurance policy. Although being proactive and buying a life insurance cover even before these changes occur in life is the best choice. 

Let’s look in detail at some of these major life changes and how a life insurance plan can play a role in them:

3. Getting Married

People in modern times prefer to get married in their mid to late twenties. While beginning this new chapter in your life, it is advisable that you consider buying an appropriate life insurance coverage. This is the ideal time to make some investments in order to provide a strong foundation of financial stability for your future. And what is a better investment than safeguarding the happiness of your beloved and future family than investing in a life insurance policy?  

4. Becoming Parents

As your family grows, so does your responsibilities. Parenthood brings the added responsibility of making sure your children never have to stress over money matters. Invest in a life insurance policy to make sure you have enough to provide for all your children’s needs, their education, their passions as well as their health. Protect their dreams for days when even you are no longer around.

A life insurance cover will also make sure that all your outstanding debts are taken care of and your children have your support and protection even when you are no more physically around.

5. Starting a New Business

If you are at a stage in your life where you want to start working on a lifelong dream of becoming a business owner, then your first steps should include buying a life insurance policy. A new business is most vulnerable to market fluctuations, funding shortage among other such disadvantages. Hence, making sure you have a life insurance cover in place to get you and your company through troubled times is extremely vital. Your business is an extension of you and your employees are your extended family, and it is, therefore, your responsibility to protect their future just as you would protect your family’s.

6. Planning Retirement

Having lived your life for others, it is now time to think about yourself and your future. Even though this is not considered to be the ideal time to buy a life insurance policy as the premiums are significantly higher, but one needs it in order to plan for their second innings. It is time to live to fulfil your dreams. Once your kids are settled, it is time to plan for your future. An appropriate life insurance cover will make sure that you don’t have to sacrifice your standards of living once you retire. It will take care of all your requirements, be it medical needs, and offer a constant source of income. It will give you peace of mind when you are alive and also once you die as it continues to support your near and dear ones financially.

In a Nutshell

It might seem like too much of an inconvenience, but putting off purchasing a life insurance policy is not a financially smart decision. Just put a tick across this box in your checklist and earn some well-deserved peace of mind. Secure the future and dreams of your family as soon as you can, gifting them the best gift possible!