Approximately 84 percent of Americans agree that most folks ought to have life insurance.
At the same time, though, only 68 percent think that they’re part of the group of people who personally need life insurance. To make matters worse, only 59 percent of Americans have any kind of life insurance at all.
If you’re part of the 41 percent who don’t have life insurance, it’s time to reconsider that decision.
Read on to learn more about the importance of buying life insurance when healthy. You’ll also learn about the different types of life insurance policies and how you can choose the best one for your specific needs.
Why Buy Life Insurance When Healthy?
Life insurance is an important thing to have. You never know what the future holds for you, and it pays to be prepared. It’s especially important to buy it when you’re young and healthy, though.
There are a lot of perks that come with buying life insurance at this point instead of waiting until you’re older, including the following:
1. Save Money
This is perhaps the number one reason to invest in life insurance at a young age. When you’re young and healthy, your premiums will be much lower than if you’re older and/or unhealthy.
The younger you are when you purchase life insurance, the less you’ll have to pay, even as you age or your health starts to decline. It’s best to lock those low rates in now instead of risking higher premiums when you get older.
2. Increase Chances of Approval
You’re more likely to be approved by an insurance company when you purchase life insurance as a young and healthy person, too.
Insurance companies want people like you to purchase their plans and will be much more likely to cover you if you start shopping for a plan now.
3. Choose from More Providers
You’ll have more providers to choose from as well if you start looking for a life insurance policy now.
As a young, healthy person, providers will practically be banging down your door asking you to purchase one of their policies.
You’ll have a lot more freedom and flexibility if you shop now instead of waiting until you’re older.
4. Prepare for the Future
It’s never too early to start preparing for the future. If you buy a life insurance policy now when you’re in good health and everything seems to be going your way, you’ll be in a better position should something go wrong later on.
Whether you need to cash out the policy to cover an unexpected expense, or the unthinkable happens and you want to make sure those left behind are taken care of, a life insurance policy will provide you with peace of mind.
5. Enjoy Built-In Savings
Many life insurance policies come with built-in savings opportunities.
For example, some permanent life insurance policies increase in value and are tax-free. This can be very helpful in the future if you ever need to borrow against the cash value of a policy.
If you purchase a plan now, you’ll have lots of time to build wealth and establish a substantial nest egg for yourself.
6. Don’t Count on Your Employer’s Insurance
Some young people assume that they don’t need to purchase life insurance because they have a policy through their employer.
Keep in mind, though, that employer-provided life insurance policies often aren’t very comprehensive.
Before you decide that your employer’s policy is sufficient, look at it carefully and consider what kind of additional coverage you could get by purchasing your own policy.
If you purchase your own policy, you also won’t have to worry about losing your insurance should you lose your job later on.
7. Protect Your Family
Investing in life insurance now also allows you to protect your family.
Later on, or now, if you have kids, you’ll have an insurance policy to help provide for them should anything happen to you.
Even if you don’t have kids, a life insurance policy is still useful. It allows you to avoid burdening your parents with a lot of debt and expenses in the event that you pass away before they do.
You also won’t have to worry about a partner having to shoulder your debt and expenses in the event of your death.
Types of Life Insurance
Okay, you can see that it’s a good idea for you to purchase life insurance. What kind of life insurance policy should you buy, though?
Listed below is a breakdown of the most popular types of life insurance that you might want to consider:
Term Life Insurance
Term life insurance lasts for a predetermined number of years. Once the policy expires, there’s no payout awarded to you unless you renew it.
This is the most affordable insurance policy and it provides you with the flexibility to determine the length of the term.
Whole Life Insurance
Whole life insurance, as the name suggests, covers you for your whole life.
It includes a cash value amount that builds over time. It is more expensive, but it’s also more comprehensive.
Universal Life Insurance
Universal life insurance is similar to whole life insurance.
It offers more flexible premium payments and death benefits amounts, though. The cash value of this policy can be linked to other investments, too.
Variable Life Insurance
With variable life insurance, your cash value is tied to investments like equity accounts and bonds.
There’s more risk associated with this type of policy, but there’s also the potential for a higher reward. You can also take partial withdrawals from and loans against the cash value of the policy.
How to Choose a Life Insurance Policy
There are plenty of options to choose from when it comes to purchasing a life insurance policy. Here are some tips to help you decide which policy is best for you:
Consider the Amount of Coverage You Need
Start by thinking about the amount of coverage you need. There are a lot of factors that will influence your coverage needs, including the following:
- Your income
- The number of dependents you have
- Your general lifestyle
- The amount of debt you have
A good rule of thumb is to purchase a policy that is equal to 5-10 times your annual salary.
If you need more help choosing the right amount of coverage, though, it helps to talk to a financial advisor before you invest in a particular plan.
Think About Your Budget
How much can you afford to spend on life insurance?
Life insurance is one of the most affordable types of insurance you can purchase. Be sure to think about what the premiums will be before you purchase a plan, though.
If you’re working with a very limited budget, a term life insurance policy is probably your best bet. If you’re willing to pay a bit more for peace of mind, though, you might be better off with a whole life or universal life insurance policy.
Consider the Insurance Company
In addition to thinking about the type of policy you’re going to buy, it’s a good idea to consider the company from which you’re buying that policy as well. It’s best to work with companies that have been in business for a long time.
Look up the company’s financial strength ratings, too, before making a decision.
There are lots of independent rating firms that issue letter grades to different insurance companies based on their financial stability. The higher the letter grade a company has, the better off you’re likely to be working with them.
This will give you more peace of mind and you’ll be able to rest easy knowing that the company won’t go under before it’s time for your beneficiaries to receive your death benefits.
Research Their Track Record
Learn about the company’s track record, too.
Do they have a history of living up to their promises? Are there any complaints against them with the Better Business Bureau or other professional entities?
Be sure to do your homework before you give a specific insurance company your business.
Don’t forget to compare rates from different insurance companies before you make a decision, too.
Take your time and look at several different options. As a young, healthy person, there will be lots of companies that are offering you good rates.
Compare and contrast them to ensure you’re getting the best deal on a policy possible.
Invest in Life Insurance Today
As you can see, there are lots of reasons to buy life insurance, and it’s especially important to buy life insurance when healthy.
If you wait until you’re older or in poor health, it’s going to be harder for you to find affordable coverage. You might not even be able to find coverage at all.
If you’re young and healthy and ready to invest in life insurance, keep these guidelines in mind. They’ll help you choose the right type of life insurance and the best policy for your specific needs.
Are you looking to improve your health so you can qualify for a good life insurance plan? If so, be sure to check out the Health section of our site today for some helpful advice.