When Should I Get Life Insurance? Let’s Figure it Out Together
When I first heard about insurance policies covering your life, I thought it was something for later on—like during retirement. But I’ve since learned that getting a policy isn’t just for the elderly. There are plenty of factors that play into deciding when you should get coverage, and it’s not as simple as it seems.
Let’s explore this step by step. I’ll share what I’ve learned, and by the end, we’ll have a clearer idea of when it might make sense for you to consider it.
What is It, Exactly?
Before we dive into the “when,” let’s quickly talk about what it is. A policy like this serves as a financial cushion for your loved ones in case something happens to you. You pay premiums (usually monthly), and in return, the company promises to provide a lump sum to your beneficiaries when you pass away. This helps cover things like funeral expenses, debts, and even provides income to your family to help keep them financially stable.
While it’s not the most cheerful subject, this type of coverage gives peace of mind knowing your family won’t be left struggling in a worst-case scenario.
The Big Question: When Should You Get Coverage?
I wish there was a simple answer. It would be great if there was a set age or life event, like turning 30 or getting married, that marked the perfect time to buy a policy. But in reality, the best time to secure one depends on your specific situation—and that varies from person to person.
Here are some common life stages when buying protection makes sense:
1. When You’re Young and Healthy
At a young age, this type of policy is probably not top of mind. You’re likely focused on your career, social life, and maybe planning your next vacation. But being young and healthy is actually the best time to purchase coverage because your premiums will be lower.
Insurance companies assess risk. If you’re 25, healthy, and free of major medical conditions, they see you as low-risk, which means you’ll get cheaper premiums than someone who waits until their 40s or 50s when health issues might arise.
It may seem unnecessary now, but buying early can save you a lot of money in the long run.
2. When You Get Married (or Partner Up)
Once you’ve committed to a partner, life coverage becomes more relevant. If you and your partner share financial responsibilities—whether it’s rent, a mortgage, or other bills—having a policy ensures that if something happens to you, they won’t be left with the burden of handling those costs alone.
And if you’re thinking about starting a family in the future, having a policy becomes even more important. It ensures that your partner and potential future children will be taken care of if you’re not there to provide.
3. When You Have Kids
Having kids changes everything. Suddenly, you’re responsible for another human who relies on you for everything—from food and shelter to education and healthcare. A policy helps make sure your children will be financially supported if you’re no longer around.
Beyond covering basics like food and shelter, it can help with future costs like education and even extracurricular activities. Having a policy in place can give you peace of mind, knowing your kids will be cared for even if you aren’t around.
4. When You Buy a Home
Buying a home is a major financial commitment. If you have a mortgage, this type of coverage can ensure that if something happens to you, your partner or family won’t struggle to cover those payments.
A policy helps protect them from financial strain. They won’t have to worry about losing the home or facing foreclosure because of an unpaid mortgage.
5. When You’re Nearing Retirement
As you approach retirement, your financial situation will likely change. You might have paid off your mortgage or saved enough for retirement. However, life insurance can still play a role, especially if your spouse depends on your income or if you want to leave a legacy for your children or grandchildren.
At this stage, you may not need as much coverage, but it’s worth reviewing your situation to see if it’s still useful for your financial plan.
What If I Don’t Have Kids, a Spouse, or a Mortgage?
If you’re single, child-free, and renting, coverage might not seem like a priority. And for some, it really isn’t necessary right away.
However, it’s still worth considering. If you have debt, like student loans with a cosigner, coverage ensures that burden won’t fall on someone else. You might also want to leave money for family members or at least cover your funeral expenses.
Choosing the Right Policy
Once you’ve decided when to buy a policy, the next step is figuring out what kind works best for you. The two main types are term and whole life.
Term life insurance is more affordable. It lasts for a set time (like 10, 20, or 30 years), and if you pass away during the term, your beneficiaries get the payout. If the term ends and you’re still around, the policy expires.
Whole life insurance lasts your entire life. It’s more expensive but builds cash value over time, functioning almost like an investment.
Choosing the right type depends on your personal situation and goals. If you just need to cover a specific period (raising kids, paying off a mortgage), term insurance might be the best option. If you want lifelong coverage or to leave a legacy, whole life insurance might make more sense.
The Right Time Is Personal
There’s no one-size-fits-all answer to when you should buy coverage. It depends on your life stage, financial goals, and who depends on you. If you’re young and healthy, getting life insurance early can save you money. If you’re starting a family or buying a home, it’s more urgent. And even if you’re not at one of those milestones yet, it’s worth keeping in mind for future planning.
Whatever your situation, take your time and make the decision that feels right for you. Having coverage is about protecting what matters most to you—and there’s never a wrong time to start thinking about that.
