Many people do not think about the importance of life insurance. They usually think that it is something they do not need to consider until they are usually older, have children, or simply even recognize that they are not going to live forever. But this the wrong approach.
In other cases, people often believe that the insurance provided by their employer will be all that they need. That sort of insurance is usually term insurance, and it is not always possible to take it with you if you leave that employer. Term insurance will only last for a given number of years. The premiums are low, but if you live beyond the end of the term, there is no payment to any beneficiaries.
Term insurance can be a good choice, however, if in conjunction with whole life insurance. Because term insurance is cheaper, a $100,000 with a 20-year term can be purchased for a relatively inexpensive amount. However, when the term ends, the benefit ends. At the same time, a lesser amount of whole life insurance can be purchased as a starting point and added to as your ability to pay the extra premiums improves, thus allowing the individual to purchase more insurance. Therefore, the question of when to purchase life insurance is a relatively simple to answer. Life insurance should be purchased as soon as possible, and don’t worry – it will reach a point where the insurance is paid up.
When this point is reached, the insurance is paid up in full and will be available to your beneficiaries when you die. The earlier you purchase it, the cheaper it will be, and unlike term insurance the premium on life insurance does not increase as you age.
The initial purchase will be based in part on your age, but the premium will be set when it is signed. Additional policies that may be purchased at a later date will base the premium on your age and health. There are certain features you should look for, which some companies offer such as:
- Guarantee insurability: This feature provides that you will be able to purchase more insurance at a later date.
- Dividends and interest accumulations: A whole-life policy, again depending on the company, will often pay dividends, which become part of the total death benefit. Most companies offer interest payments on the earned cash value of the policy each year.
But the primary reason why you should buy life insurance? To set up financial security for your family.
Providing such assistance or security for your family in the event of your death is important. No one can predict when they are going to die. Thus, in the case of a married couple where both are working, a death can leave the surviving spouse with a considerable amount of debts to pay.
The insurance benefit can be used to help pay burial expenses and other costs. The benefits can also be used to help pay college tuition costs for children, if you die at an early age. The amount of insurance purchased will depend on the size and needs of the family and the cost of the premium. Many policies offer guarantee insurability options where additional insurance can be purchased at certain intervals without the need for any medical tests or examinations.
In short, there are some helpful things to remember when considering getting life insurance:
- Purchase insurance as soon as possible.
- Remember, you can always purchase additional insurance as needed.
- Whole life insurance reaches a paid-up point where monthly payments are no longer needed, but the benefit is still available to the beneficiary, upon your death.
- A combination of lower cost term insurance and paid-up fill life insurance will help cover any expenses that may be incurred if you die at a younger age.
- Talk to several agents before making a final decision. Different companies have their own incentives to attract you. Find the plan that is best for you and your family.