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When is a Good Time to Buy Life Insurance?

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Fiona Staff2/25/2022

There are a number of key financial milestones that mark one’s foray into adulthood. Some prominent ones include contributing to a retirement 401(k), taking out a mortgage, and, of course, buying life insurance. 

While life insurance is an important purchase that many of us will eventually make — when is the right time to buy that first policy? Let’s go over some popular instances for obtaining coverage. 

Once You Share Debt with Someone

Whether you’re 25 or 45, it’s always wise to consider purchasing life insurance coverage if you have any sort of shared debt with another person. This could be anything from an auto loan to a joint credit card or even a mortgage that you take out with your spouse.

If you were to die while carrying certain types of shared debt, the other person on that account would remain liable for the remaining balance. In some cases — for example, some student loans — the lender could even call the entire balance due immediately after your death.

Only certain types of debt will transfer to your loved ones if you pass away, though this is usually the case if you have a co-signer. Purchasing enough life insurance to cover at least your shared debts is both a kind and responsible thing to do.

When You Get Married

You vowed ‘til death do you part. However, your financial obligations will last even longer than that, if you were to unexpectedly pass away. 

Life insurance coverage should be a consideration once you get married, to provide for the spouse you’d leave behind and help cover any shared household expenses. You can purchase enough coverage to ensure that your significant other can retire comfortably, maintain their lifestyle without your income, and cover any existing unpaid debt.

You can protect your spouse with temporary or permanent coverage, or even a joint life insurance policy if it makes sense for your financial situation.

Can’t decide how long you need life insurance coverage to last? Fiona, in partnership with LeapLife, can help you shop around for an affordable policy that meets your family’s needs, whether you’re looking for term or permanent coverage.

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After You Buy a Home

A typical home mortgage repayment lasts for decades, with most homebuyers opting for a 30-year fixed-rate loan. If you pass away unexpectedly while your mortgage is still being repaid, your family will be left with the remaining debt.

Whether you have a spouse as co-borrower on the mortgage, or if your home would pass to your estate and go to your next of kin, someone will need to either continue paying the mortgage or sell the property. By purchasing enough life insurance to cover the remaining debt — along with other important household and related expenses — you can ensure that your loved ones aren’t left scrambling to sell or strapped for the monthly payment.

When You Have Children

If you’re a parent, or soon to be, now is a great time to purchase life insurance coverage. Calculate how much your child(ren) will need until they are out of the house and independent. Consider food, shelter, clothing, sports/other activities, and big-ticket items like college tuition or wedding costs. 

Life insurance can protect your kids for many years to come. Plus, some policies will even allow you to purchase child riders that can convert into personal whole life policies once your children reach adulthood.

Before You Lose Workplace Coverage

Employer-sponsored plans are an affordable way to buy coverage, but they are limiting. First off, you’ll only be able to buy the type of policy your employer allows, up to a maximum coverage limit (usually a multiple of your salary). Additionally, this coverage will usually end once you leave that job or retire. 

Buying a personal policy — even if it’s to supplement workplace coverage — allows you to have adequate coverage that follows you no matter where your career takes you.

While You’re Healthy

The younger and healthier you are, the more affordable your life insurance policy will be. By buying early, you can avoid the higher premiums — and additional coverage limits — that come with age or deteriorating health, allowing you to lock in coverage before your cost of insurance inevitably increases. You’ll also be eligible for higher coverage limits and the ability to take out additional policies, which both become limited as you get older.

Certain medical conditions may even make you uninsurable, especially while you’re still in treatment. Being diagnosed with cancer, diabetes, or heart disease, for instance, may make it nearly impossible to purchase enough life insurance coverage at a reasonable price. 

Bottom Line

Life insurance is one of those products that you buy, but hope to never actually need. Buying at the right time (which typically means as early as possible) can ensure that your loved ones are always protected, no matter what life brings. 

In the market for a new policy? Fiona, in partnership with LeapLife, offers an easy and comprehensive way to get matched with personalized life insurance quotes from A-rated (or higher) carriers in all 50 states.

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