No one knows if they might die unexpectedly. Still, if you buy a personal term life insurance policy, then you can create a vessel to assist your loved ones once they no longer have your income as support. You might not think it’s a good idea to buy term coverage while you are still young. However, this is a prime time to buy a policy.
What is Term Life Insurance?
A term life policy covers you for a set time, such as 5, 10 or 20 years. If you die during the term, then the policy will pay a beneficiary (such as a spouse) the money in the policy. Your beneficiary might use that money for a variety of needs, like the mortgage or a child’s education.
Most people who buy term policies do so because they want the policy to protect them for a time when they have certain financial needs. They can have a policy for as long as they want, but then dispose of it in time. During your early life, you often have more financial burdens, so this is a great time to have a policy. A term policy can often provide greater benefits the earlier you buy.
Benefit 1: Cost Savings
While you are young, your risk of death is lower. As a result, your insurer has a lower chance of having to pay out on your death. They therefore assume a lower cost risk by offering you a policy. If you buy at or around age 30, you likely can lock in lower rates over the policy’s term.
Benefit 2: Better Chances of Approval
Many term life insurers require applicants to disclose health issues and other information. This helps them measure the risk they assume by insuring you. The existence of certain conditions might disqualify you from getting your application approved. Since most younger people are healthier, enrolling early often better guarantees coverage.
Benefit 3: More Policy Options
Even if you do have existing health conditions, that doesn’t mean you can’t get life insurance. However, you might find that you have only a limited number of policy options. Individuals who apply when older often find that they don’t have the same choices, either. The earlier you buy a policy, the more policies you might be able to choose.
Benefit 4: Flexibility of Policy Use
By buying earlier in life, you might have a variety of goals for how you can use this coverage. Therefore, you can establish rules to direct the policy funds where you want them to go. Your coverage will therefore benefit you in the best ways, and you can let it go when it expires.