Buying life insurance is something that most people don’t even think about until they’ve established their careers and started a family.
More often than not, the main reason so many people look into life insurance in the first place is because one or more individuals have come to rely on them (children, aging parents, or extended family), prompting question: “What will my family do if I’m suddenly gone?”.
While the answer to this question is going to vary from person to person, there are some great reasons to consider buying a life insurance policy even if there are no dependents in the picture. Moreover, there are multiple factors that play into this decision, which we’ll be discussing in this week’s blog post.
[Note: Shell Mutual Insurance provides a valuable service in helping to locate the best life insurance coverage to suit whatever stage in life you’re in. This blog post is meant to provide basic information about life insurance—for more detailed information including coverage options and premiums, please contact us.]
A Surprising Answer
When we talk to new customers about the best age to be when buying a life insurance policy, they’re often a bit shocked to learn that the optimal age is one day old.
That’s right: the best time to get a life insurance policy is literally right after being born. But, why is this? How could a newborn baby benefit more than, say, a 45 year-old man with a wife and two kids?
The reason for this is a feature of life insurance called ‘age banding’. It works like this:
- For every year older a person becomes, the value assigned to their life insurance policy, at that age, grows progressively more expensive. So, a five year-old is going to be slightly more expensive to insure than a newborn. As will a 30 year-old versus a teenager, and so on.
- Parents of newborn children can opt to buy life insurance for their new baby at a cut rate, often being able to pay a single, lump sum for life insurance that lasts the baby for their entire lifetime.
- As the insured grows older, the value of their life insurance remains ‘age-banded’, meaning it grows as they grow. For this reason, life insurance policies can become investment vehicles over time, providing tax-deferred returns.
Even though it’s best for everyone to obtain life insurance coverage immediately following birth, it doesn’t always work out that way. Life circumstances, financial priorities, and other dynamics can factor into whether or not life insurance coverage is even feasible for many families. Later in life, however, when young children grow into mothers and fathers of their own children, buying life insurance remains an option.
Some of the other key benefits of having a life insurance policy are:
- Equity in the policy can be borrowed against
- Premiums can be automatically debited from your checking or savings account
- Online account access gives you 24/7 insight into your policy, coverage options, and more
The morale is that you’re never too young to buy life insurance, but even if you “missed the bus” on getting it earlier in life, it’s never too late. And, there’s even more good news when it comes to today’s life insurance marketplace—the coverage options, investing alternatives, and cost structures allow for customized life insurance policy tailoring that hasn’t ever existed before.
Remember that life insurance policies have varying payout amounts and coverage levels, resulting in premiums that can be made to fit virtually any budget. As a general rule, the lower the payout for the life insurance policy, the lower the monthly premium is going to be for most people.
Even though some life insurance underwriters might offer slightly different coverage options, the premiums associated with their coverage is going to be roughly the same. The most important trait for those companies that are doing the policy underwriting is that they are financially solvent and proven to be a reputable underwriter.
Don’t Wait—Longer Lives Cost More to Insure
It’s a fact: life insurance is always going to be more beneficial in the long run when it’s purchased at a younger age. The longer you wait, the costlier it becomes.
Thankfully, Shell Mutual Insurance is available to provide the peace-of-mind that comes with having a high-quality, affordable life insurance policy in place to financially protect family and loved ones—regardless how old you are, what your health condition is, or if you’ve had coverage in the past.
There is a policy out there that is perfect for you, and we’ll help you find it. Contact us today to learn more.