At any moment, your life could end with no warning or final farewells. Would all your affairs be sorted? Would your loved ones be financially supported?
If you purchase life insurance, then your family will be compensated in the event of your passing. But do you know when to buy life insurance?
Make sure your timing is right to maximize all the benefits of life insurance.
Two Types of Life Insurance
Before purchasing life benefits, you need to know the two different types of life insurance. The first basic type is term life insurance and the second type is called permanent life insurance.
Each type can suit your lifestyle and current needs.
Term Life Insurance
This insurance policy is perfect for people who have dependents. If you and a partner are both working, then you’ll both need life insurance in the event that you both pass away.
Term life insurance will last for the length of the term. Once the term ends, you will have the option to terminate, renew, or convert to another type of coverage. Reputable companies like WRS Insurance Solutions can guide you through the choices.
Ideally, a person should get term life insurance when they are younger and have children or dependents.
Permanent Life Insurance
Permanent life insurance policies are not only great insurance plans, but they can double as a retirement fund. These life insurance policies will grow, and you won’t have to pay taxes on them until later.
Additionally, a person can choose to withdraw the cash value at retirement age or use the money to purchase a home. The younger a person starts, the more value the insurance account will be worth.
Another benefit of permanent life insurance is that the cost of the premium is fixed from the day you start until you stop.
When to Buy Life Insurance and When to Wait
There is no specific age when you should purchase life insurance. Life circumstances and situations will dictate the best time for anyone.
For example, someone who is 40 years old, working, single, and has no kids probably won’t need life insurance since they don’t have people who depend on them.
On the other side, a person who 22 years old, working, married, and has a child will need to purchase life insurance as soon as possible. If that person unexpectedly dies, they will want to make sure the family isn’t financially hurt.
Anytime someone depends on your income, it’s a good time to purchase insurance. Without any dependents, you can hold off buying health insurance. Use the extra money to invest in better opportunities.
Get Covered
One of the worst-case scenarios in life would be if you passed away and left no money or resources for your partner or children. Life insurance is a necessary financial parachute for you.
Knowing when to buy life insurance will give you peace of mind and possibly a small retirement fund later in life.
If you’re interested in more personal finance topics, please keep scrolling our blog.
