What is the Right Time to Buy Life Insurance
A common question with regards to life insurance is ‘What is the right time or age to get insured?’ While there is no single answer to this question, this post will make it easier for you to make the right decision.
With all the different options like whole life insurance, term insurance, endowment plans, and Unit Linked Insurance Plans (ULIPs), selecting one as per your insurance needs can be confusing. But concerns with regards to choosing the right type of insurance only get into the picture when you are out to buy life insurance. You should know the right time to make the purchase. Should you do it in your 20s, or is 30s the better option? How about purchasing life insurance in your 40s or 50s? The information below will help you decide what is right for you.
Do you have people depending on your income?
- Understanding the right time to purchase life insurance is as simple as understanding what life insurance means. If you have purchased life insurance, your nominee will receive the death benefit in case you die within the policy tenure. In other words, the death benefit works as a replacement for the income the policyholder used to earn before his/her demise.
- If you understand this, then it shouldn’t be difficult for you to realise that the right time to purchase life insurance is when you have family members depending on your income. The dependents could be your parents, siblings, spouse or children. Based on this, the 20s seem to be the best age to get life insurance as most people start earning around this age.
The age factor
- Apart from the dependents factor, you should also consider your age to decide the right time to purchase insurance. You are at your healthiest when you are young. So, the chances of your unexpected demise are comparatively low in your 20s as compared to when you are in your 40s.
- The healthier you are, the lower the chances of your demise, and the lower the possibilities for the insurer to pay the death benefit. Due to this, the life insurance premium is lower in the earlier years of life and start getting expensive with age. So, even if you do not have dependents, it is still wise to purchase life insurance early in life as it proves more cost-efficient.
Making the decision
- One of the most common investment tips that you would come across is purchasing life insurance as earlier in life as possible. Now you know the reasons why this makes sense.
- While there is no fixed age when you should purchase life insurance, you should keep the above points in mind to decide what is best for you.
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