When do you need to buy life insurance? Well, if you are a parent, life insurance can protect your family’s future. But what if you don’t have kids? In fact, you may be years away from having a family. And if that’s true, you may ask yourself, why you need to you need to buy life insurance at all.
It turns out, that getting life insurance when you’re young and healthy is actually a pretty good investment in your future.
Think long-term and buy young
When surveyed, a whopping 40% of respondents said that they wished they had purchased policies at a younger age. Why? Because buying life insurance young can save you a lot of money over time. You’ll be able keep premiums low as they can be. Premiums increase with age. Premiums can also increase if you experience health issues (often the likelihood of this happening increases as we get older).
Although its life insurance is at it’s most affordable when you are young and healthy, most people do not purchase at the age when they can obtain a cheaper rate.
A good thing to remember when thinking about life insurance is that once you buy, your rates won’t increase for the entire term of the policy. So the rate of premium you get when you’re young and healthy is the same rate you’ll pay 10, 20 or 25 years from now!
Insurance is more affordable than you think
Younger people often have the complication and urgency of competing financial responsibilities and an investment in insurance doesn’t seem like a priority. Without a house or kids, insurance doesn’t seem like a must-buy, right? But here are some things to consider:
- if you have debt (student loans, anyone?),
- a mortgage, or
- live with a partner who makes a lot more (or a lot less!) than you do
Getting life insurance when you’re young is a great way to make an investment in your future.
And here’s the good news: It’s usually a lot more affordable than you may think! Gen Xers perceived the cost of life insurance to be 119% more expensive than it is. Half of Millennials believe the estimated yearly cost for a $250,000 level-term life insurance policy for a healthy 30-year-old is $1,000 or more. When, in reality, it’s closer to $160 per year! it’s worth it to get a quick quote to see how much insurance you can afford.
Employer Benefits May Not Be Enough
In the current gig-economy, people don’t have the benefits plans, that used to be the norm. If you’re lucky to have benefits through your employer, you may have received a life insurance policy. Often these group life insurance policies are just enough to cover funeral arrangements. But here are some questions you should ask yourself about your group life insurance: Is it portable? What if you change jobs? And does it cover all your debts? Is it enough to allow your significant other to continue to live in your home should you pass away? If the answer to any of these questions is “no” you may be interested in topping up your insurance with some term life insurance.
Get a needs analysis – it’s free and it will help you asses how much insurance you need. It’s a calculator that helps you determine how much additional coverage you require above your current coverage, based on your current financial situation.
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At Teachers Life, we’re here to support Canadians from the start of their career to retirement. In our blog series, Insurance Basics, we aim to demystify life insurance. Follow us on Twitter, be a part of our Facebook community, and now you can follow us on Instagram.