By Gabriel DeSouza
Full disclosure: No one enjoys talking about life insurance; can I get an “Amen” from the people in the back?
It is not a comfortable topic by nature because the sole purpose of this insurance policy is addressing the loss of a loved one and confronting the potential of your own passing. (Someone has to die to collect the insurance proceeds). However, there are many benefits to having this conversation sooner rather than later. If you have a home, kids, are married, or are at the beginning of your professional career or life, here are a few reasons why you should consider life insurance before you think you need it.
1. The earlier the better.
Why? Simple: premium. When you are younger generally you are healthier than you would be in ten years. And if you are healthier you generally qualify for better rates. The better your rates, the more competitive your premium will be. The rationale from a life insurance company is: the younger you are the less your chances of dying anytime soon Since your chances of dying (Mortality) are lower insurers can offer reduced rates than someone 10 years your elder.
2. Locking in your rate.
What does this mean? Many insurance policies (homeowners, auto, etc.) are annual policies, but life insurance can be purchased for various policy periods – in plain English, the length of the policy. Policy periods are traditionally 10, 20, and 30 years, with some companies even offering 40 years. When you purchase a life insurance policy you lock in that rate for the entirety of your policy. In other words, if you purchase a 30-year life insurance policy at age 25, your policy will expire when you are age 55. The rate you will pay for the duration of those 30 years will be the original rate purchased at 25. The same is true at whatever age you start your policy. Therefore, it works out to your advantage to start your policy as early as possible to lock in the most advantageous rate.
But you may say to me: “Gabriel, I see what you are saying, but I already have life insurance - through my job” Which leads me to my last thought:
3. This is YOUR policy.
By that I mean you can take this policy with you wherever you go. If you work for an employer that offers you life insurance, you lucked out, however, if you were to change jobs, your life insurance policy will not follow you. When you have a stand-alone personal life insurance policy, you do not need to worry about if it will follow you or not. As long as it stays active, the coverage is yours.
Though uncomfortable, life insurance is an important conversation to be had. By building it into your expense portfolio, you can budget for the monthly payments, and it will give peace of mind to your loved ones and you knowing that they will be assisted financially should the unthinkable happen. The earlier you have the conversation the more you will benefit.
If you have any questions please feel free to reach out to me via email at email@example.com or phone at 508-289-4154.