C'est La Vie! When to Buy Life Insurance

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There are many times throughout your life when, if you don’t already have it, you should think about getting life insurance. Or, if you already have a policy, revisit your life insurance needs.

When major life events happen, we’re often busy, preoccupied and have other thoughts on our mind. Fair enough, but, it’s exactly during these times (or shortly thereafter) when getting, or updating, your life insurance should be considered.

Circumstances change, and so will your life insurance needs when you:

  • Start a new job
  • Get married
  • Buy a home
  • Start a family
  • Find yourself unemployed
  • Go into business for yourself
  • Find yourself single again
  • Plan your retirement
  • Lose a spouse
  • Retire

Life insurance in your 20s

As much as it may not seem like it at the time, buying life insurance is often a smart and financially responsible move in your 20s. Life insurance rates when you’re young and healthy are usually the cheapest they’ll ever be, and buying now lets you lock in premiums for years (if not decades) to come.

How affordable is it? Life insurance quotes at InsuranceHotline.com for a Term 10 life insurance policy with a face value of $250,000 came in as low as $165 per year for a 25-year-old male and $125 for a female, non-smoker—that’s per year, and less than a dollar per day.

Life insurance in your 30s

For many people, this decade represents a time of commitment; marriage, starting and raising a family, and home ownership. It’s a lot of responsibility and with it comes the responsibility of preparing for the "what if" scenario. What if something happened to you or your spouse, and how will it affect your family? There’s a lot to consider, because there’s a lot at stake.

How much is enough life insurance? Typically, industry insiders will suggest that you have five to 10 times your annual, pre-tax salary in life insurance protection. This is a rule-of-thumb and everyone’s situation is unique; that’s why it’s always best to discuss your situation with a professional to make sure you are properly protected.

Life insurance in your 40s

By the time you’re in your 40s, often your family is well established and your mortgage is under control. In addition to taking care of the "what if" scenario and ensuring your family’s immediate needs are taken care of (paying off debts, offsetting the loss of income, and contributing towards future education costs), it’s at this time when many people start to look long-term and use life insurance as an investment or estate creation tool too.

Life insurance in your 50s and 60s

In your 50s and 60s, the reason for life insurance usually shifts so that it includes supplementing retirement, estate planning and leaving a legacy.

The children may be out of the house, the mortgage paid off, and you’ve got a firm handle on your savings and investments, but life insurance can:

  • Ensure your spouse is taken care of at a time in their life when their biggest earning years are behind them.
  • Pay fees that are typically due on death and can be significant (like taxes, probate costs, and funeral and burial expenses, for example) ensuring that the estate is left fully intact for the intended beneficiary.
  • Leave a legacy to a favoured charity.

Life insurance at any age

While the reasons we have life insurance in our 20s are vastly different than when we’re in our 50s, there’s no denying that it’s a tool that can play an important part in your overall financial plan. If you’re asking yourself when the right time to buy life insurance is, chances are the answer is now.