Life insurance is one of those necessary expenses that you will need as you become an adult. While you don’t want to wait too long to get life insurance, you may want to put it off while you’re young. Rather than focusing on age, you should determine your need for life insurance by evaluating your stage in life.
You’re Never Too Young
Much like saving for retirement, starting a life insurance policy at a younger age is better for your financial security. You can get a better rate when you’re younger because you’ll be healthier. Even though this is an added expense at a time when you’ll be paying a mortgage, car loan, and tuition, it will help you to better protect your family in the future.
What Factors to Consider
If you’re young and single, you can probably afford to put off getting life insurance for a few more years. However, as your life changes, you should reconsider getting some type of coverage. If you get married or have children, you’ll want to ensure your family can survive if you die unexpectedly. If you own real estate or have a car loan, you should consider what will happen to those assets if you die without insurance. In that case, the real estate may be foreclosed and your vehicles may be repossessed.
There Are Benefits to Starting Early
If you pay on a whole life insurable policy throughout your life, it will mature before you reach retirement age. The contributions you make will be tax-deferred, meaning you won’t pay taxes on your premiums until you withdraw the cash value of the policy. Once you do, you can use that money to finance your retirement, pay off your mortgage, or you can save it to cover future medical expenses. To earn enough money to cover these expenses, you must start a policy while you are still young.
Waiting too long can cost you more in terms of what you’ll pay in premiums in addition to leaving you uncovered for too long. A policy that might cost you $211 a month in your 30s could end up costing you double that amount if you wait until your 40s. Overall, starting a policy when your younger will help you keep those premiums lower for longer.