Life Insurance – Buy It Now!

life insurance

Insurance isn’t the most exciting of topics and when it comes to life insurance, the subject becomes even less attractive.

Pondering the thought of what might happen when you are no longer here is a difficult matter to consider and it’s understandable to want to put it off for another day.

However, making sure your loved ones have the security they need is an important part of your financial planning. And for most people that means taking out life insurance to ensure there’s money to pay for the essentials if the unthinkable happens.

Some people resent taking out life insurance when they are young because they believe they will be paying for cover they aren’t likely to need for many years. And whilst that might be true, if you are one of the unlucky few where tragedy strikes early, you will have left your loved ones to fend for themselves.

Here are five reasons why you should seriously consider taking out insurance sooner rather than later.

1) It’s cheaper

If cost is something which is a factor, you might want to consider the benefits of taking out insurance at a younger age.

Even if you reach 50 years of age in perfect health, a 20 year old in reasonable condition will still qualify for cheaper insurance than you. This is because insurance is priced on the law of averages – and the chances of dying at 20 are much lower than the likelihood of you passing away once you reach middle age and beyond.

When you take out a life insurance policy, premiums are calculated on the age at application. You can opt to allow the premium to increase with inflation or by a fixed amount, but whatever you pick, the amount you are charged will be far less than the core premium for older applicants.

Using a comparison tool will help you identify the companies that offer the cheapest rates for your age bracket.

2) Insure yourself while you are healthy

Life insurance is a long term contract which means that unlike other insurances – such as car insurance – you don’t have to renew your statements every year.

The length of insurance contracts varies greatly depending on the type of policy you take out, but frequently are at least 10 years or longer. This means that no matter what happens, as long as you keep paying your premiums during that period, you will be covered.

When you take out a life insurance policy you will be asked some questions about your health. Depending on how much cover you want, you might also be asked about your occupation and hobbies too.

It is essential that you are honest about the information you provide because if you are found to have either withheld facts or not told the truth, your claim could be denied and your family won’t receive a penny.

Your medical condition will dictate how much the insurance company charges you. For life insurance, they won’t be concerned about disabling symptoms such as back pain or creaky knees but conditions such as high blood pressure, raised cholesterol or even more significant illnesses such as cancer or heart attacks will affect the premium.

In some cases, if you have serious medical conditions or the illnesses have been very recent, you may be refused cover altogether. Obviously, as you get older the chances of developing illnesses increases which means you may not get the insurance you want, or will have to pay an even higher premium because of your health.

3) Build up a fund

There are many different types of life insurance; some are budget, no frills which simply offer protection in return for a premium whilst others have more bells and whistles.

Some of the more complex types of life insurance are unit-linked. This means that as well as paying for the life insurance, the premium is also invested with the aim of acquiring a value. This allows the policy to be considered as a type of investment as well as insurance.

Whilst the primary purpose is always insurance, the surplus premium can build up over the years and grow into a very significant sum. This provides the opportunity for you to use the money to fund the policy as you get older, meaning you will not have to pay for insurance after you have retired. Alternatively, you could either withdraw some of the money or even cash in the policy completely – especially if you now have financial resources elsewhere which provide for your family’s needs.

4) Your needs are greater when you are younger

Although your risks increase as you get older, if something were to happen whilst you were younger, it’s likely that the impact would be greater.

Very few older couples are responsible for caring for a young family and the chances are that they will have paid off all or most of their mortgage. In direct contrast, a young couple may be about to start a family, or perhaps have small babies to financially protect, as well as having just taken on the expense of buying their own home. Earlier in life earnings are likely to be lower too, whereas later on, careers become established and the salary rises accordingly.

If you are self-employed, starting out can be a risky business and mean your family are particularly vulnerable for a while. If anything happens to you during this period, they won’t have any financial security to fall back on. As the years pass and your business becomes established, you will have the opportunity to create a nest egg for the ones you love.

5) Because you just never know

Although undoubtedly the risk of dying increases as we age, there is always the chance that something could happen. Whether it’s being struck down suddenly by an unexpected illness or being involved in an accident, every day we take our own lives into our hands.

By assuming that you will be safe until later in life, you are risking leaving your family unprotected. Insurance is all about providing a safeguard for when you just don’t know what the future holds, whether that’s for your car, your house or in this case, your own life.

If you don’t have much time to yourself, you won’t want to spend hours scrutinising the terms and conditions from each insurer. Therefore using a comparison tool to find life insurance quotes online could allow you to find an insurer which provides the most competitive prices for the type of cover you want.

Don’t leave it too long to get insurance, because you just might find that it’s too late to get what you need at a price you can afford.

Author Bio

An article by Samantha Wood, a very experienced writer of financial services articles.

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