You can think about life insurance anytime but you can only do something today. That’s why you gain by thinking about insurance sooner. You don’t need to act now, but you can prepare.
Lock in your insurability
You can’t get insurance anytime you want. You must qualify. Since we can’t tell what’s going to happen to our health, waiting isn’t in our best interest. Getting term life insurance is a good way to lock in your insurability. For budgeting reasons, you may select a solution you find suboptimal — say Term 10 when you prefer permanent. Since you can convert to permanent later regardless of your health, you don’t need to stay uninsured until you can afford permanent.
Know your rights
Term life insurance usually gives you the right to convert to permanent insurance regardless of your health. This option expires at an age like 60, 65 or 70. If you don’t check sooner, you may find you’ve lost this option. You can still apply for new life permanent life insurance but only if your health allows.
Avoid renewal shock
Term life insurance allows you to renew your coverage at the end of each term until a maximum age. This seems good until you look at the renewal premiums — then they jump sharply. If you buy Term 10 and realize you need protection for longer, don’t wait until renewal time; you should explore your options sooner.
The right beneficiaries
As your life changes, you may want to change who gets your death benefit (called “beneficiaries”). Examples include:
- You have a different spouse
- You adopted a child
- One child might need more financial help than the others. The reason could be a disability or vastly different incomes.
The magic of compounding
Permanent life insurance with a cash value — whole life or universal life — lets you take advantage of compound tax-sheltered investment growth. Albert Einstein called compounding a mystery of the universe. More magic happens the longer the tax-sheltered growth occurs. The sooner you start, the more years you have.
Your situation will change with time. You may need:
- More coverage: maybe you’ve added a mortgage or have more children
- Less coverage: maybe you’ve paid off your mortgage and your children are now independent
- Additional coverage: you might need coverage for a partner or for the risks of disability or a critical illness
You may be able to make changes to what you have or buy something new.
The bottom line
Waiting will cost you more because you’ll be older and your health may have changed. Thinking about life insurance sooner gives you more options.
Get a custom life insurance quote now.
- How Does Buying Life Insurance Change When You’re a Senior?
- How to Get Life Insurance if You Have a Medical Condition
- What’s the Point of Joint Last-to-Die Life Insurance?