Insurance varies from life insurance around the world to golf insurance in Japan. Are you considering life insurance, but aren’t sure what to get, and when?
If you’re looking for life insurance, and are wondering the best time to get it, explore this article. Read on to answer the question, what age should you get life insurance, and why is it so important?
What Is the Best Age for Life Insurance?
You might be wondering, at what age should you get life insurance? No matter how young or old you are, the answer is now. When you’re younger, you’ll receive a lower premium.
As you age, health problems could pop up that make you disqualified, or have your premiums skyrocket. Explore different life insurance plans out there, such as SimpleLifeInsure.com.
It’s best to determine if you can afford the premium of life insurance since you might have student loans, car payments, and mortgages. When you wait to buy life insurance though, it can have a similar detrimental effect, like not saving for retirement.
Locking in the Rate
Keep in mind that with certain life insurance policies, you can lock in the rate. This means that it won’t increase until your policy expires. If you don’t lock in the rate, then you can see your premium rates increase.It’s also wise to apply for coverage while you are young, and before you develop any type of adverse health issues. Says Melissa Harris of Diabetes 365 ” Having a policy in place before developing a chronic illness such as Diabetes will keep the cost of life insurance extremely cheap. Life insurance with Diabetes is obtainable, but if applying with this disease rates will be considerably higher. In the event you have a policy in place, and then have a change in health, your rates will not be altered.”
Choosing Term Lengths
Be careful when choosing term lengths. If you choose a term length of 10 years, the policy could expire long before your family needs to use it. This can mean that you’ll need to buy a permanent or longer-term policy.
If you go with a term life policy, you can normally switch to a permanent option that goes into effect at a certain age, or specific time-frame.
What Affects the Cost of Life Insurance?
Whether you’re looking for life insurance for women or men, the rates will be affected by your health, age, and occupation.
If you have what’s considered a dangerous job such as pilots, garbage collectors, nuclear scientists, and others, you’ll notice your rates are higher than what others pay.
For those who have a pre-existing health condition, whether it’s heart disease or diabetes, your rates can also increase.
Along with your rates increasing, this can mean your coverage options are decreased.
Your family’s health can also affect your life insurance rates. Was your parent diagnosed with a heart problem? If they see certain health problems in a family, they might raise your rate.
Choosing a Policy
Before you choose a policy, you’ll want to calculate your minimum death benefit necessary. Life insurance is there to replace income if you die. The death benefit will be given to your beneficiaries after you pass.
You’ll want to make sure it’s enough to replace your income, so your dependents can have time to adjust. You’ll want it to cover a few years of your salary at the least.
Why Get Life Insurance?
Besides providing income for your beneficiaries after you pass, there are many other advantages. Some will obtain it to pay for the expense of funerals. It’s a way that some build wealth since there are investment options.
Some take out life insurance as a way to benefit from tax breaks for their beneficiary.
Understanding the Different Types of Life Insurance
Life insurance falls under 2 main types:
- Term life
There’s the option of Universal Life Insurance, which is a permanent life insurance option. Premiums can vary over time, but there are investment options. The different options are cash values and investments.
Term Life Insurance
Term Life Insurance means it only lasts for a certain period of time, with no cash value. Once it reaches the time-period you paid, it’ll expire. If you make it convertible, then it can change over to permanent life insurance.
The pros of Term Life Insurance are:
- They’re understandable
- The death benefit is the same
- It’s less than permanent life insurance
- You don’t pay for fees, just coverage
The cons are:
- There’s no cash value
- You can outlive the policy if it’s not convertible
Whole Life Insurance
Whole life insurance is a permanent option. Since it’s there at all times, the rate is higher than term-life options. Your cash value increases over time, and there’s a guaranteed death benefit.
Some whole life policies allow you to skip a medical exam. While the rates will be lower for good health, certain policies won’t turn you down when you don’t have great health.
The pros are:
- Your death benefit is predictable
- Your premium stays the same
- You can build a cash value
- Policy can be used to help address final expenses and burial costs
The cons are:
- There’s no flexibility for your death benefit
- No flexibility in premiums
- Very expensive
Universal Life Insurance
Universal Life Insurance is an adjustable option. You can change the death benefit and premium over time. This will affect your cash value though.
The pros are:
- Your cash value increases with the interest rate
- More flexibility than Whole Life Insurance
The cons are:
- For it to stay active, it needs a positive cash value
- No guaranteed premium like whole life
- The rates vary which could mean the interest on your cash value is low
Determining What Age Should You Get Life Insurance?
Now that you’ve explored the answer to, what age should you get life insurance, you should be well on your way to finding the best coverage.
Would you like to learn more about money, health, and life? Check out our other articles today.