When is The Best Time to Buy Life Insurance?

Life insurance isn’t a purchase you make for yourself.  It’s for those that we leave behind.  So when do you buy it, and how much coverage do you need?  These are just a couple questions people ask when considering such an important decision.  The following helpful tips are guidelines to use when thinking about buying life insurance:

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When you are young:  People don’t typically need life insurance before they are an adult.  If someone passes at a young age, it doesn’t really present a financial burden on anyone.  Now, an argument for purchasing at a young age is that the insurance will cost much less, and it can grow with the child.  If you are a young adult caring for parents or another individual and they depend on your support, you may want to consider buying life insurance as well.

When you marry:  If you marry, don’t have children yet and both spouses contribute to the household equally, there may not be a need for insurance.  However, it could still present a burden if one spouse cannot keep up the mortgage payment and additional household bills on one income if the other passes away.  So, you may want to take into account your specific circumstances when weighing the need for life insurance.

When you have children:  If your household has children and relies on one income, this is the perfect example of a high-need situation.  If the income earner of the household should die, the burden would fall on the nonearning spouse.  So, having insurance on the breadwinner is crucial.  Also, if the nonearning spouse passes away, the cost of daycare could be costly so a policy on both spouses may be in order.

When you are at retirement age:  After your children have grown and moved away from home and you are no longer supporting them, there isn’t much need for a large amount of life insurance.  However, if your estate is large enough to be subject to estate tax, you could use a death benefit to pay the IRS.  Also, the policy would not be counted as part of your estate if it was held in a trust.   In this case, you may want to consider a whole life policy because you will need to keep your coverage indefinitely.

If you have any questions about the important decision of life insurance, please call your agent at Barker, Beck, Collins and Kronauge Agency.  We are here for you and your family’s insurance necessities.