When should you get life insur­ance?

“When do I need life insurance?”

Of all the questions insurance professionals field, this might be the easiest. Why? Because for nearly every client and situation, the answer will be “as soon as possible.” There are always exceptions, but for most people – no matter your address, family size, or occupation – life insurance is fundamental, Assurity experts explain.

It’s a wise, foundational piece of insurance protection and financial planning, they advise, and one that fits most budgets. Yet, in 2024, 102 million Americans said they need life insurance or more of it.

Read on to dispel the common thought barriers that delay the purchase of life insurance, why it matters and simple ways to get started.

Life Insurance: Common questions and objections

What’s the rush?

Generally, the younger and healthier you are, the less your policy costs and the more money you save. Because health risks increase with age, you’ll pay less for life insurance in your 20s than in your 40s.

When you are young, you can secure the lowest rate permanently with a Whole Life Insurance policy or cover an optimal period of time with a Term Life Insurance policy, choosing a term of 10 to 30 years.

Whole Life Insurance may have a higher price tag because it’s intended to cover a lifespan, while term life is usually the most affordable option, purchased to cover a specific debt for a specific number of years: for example, a mortgage with a 30-year term.

Waiting until later in life, particularly above 60, can result in higher rates and less policy options.

Whether you are single or head a family of five, you likely have loved ones you want to protect financially in the event of a death, or debts you don’t want to pass on to those closest to you, such as educational loans or a business loan.

Shouldn’t I wait until…?

It’s easy to focus on goals and budgets and put life insurance on the backburner. Whether you are ‘this close’ to graduating from the university, halfway through your loan payments or supporting a growing family, life insurance can be for all stages of life, from your working years to retirement or to leave a legacy.

Try this: flip the thought process to think of the budget items you are putting ahead of life insurance as the things life insurance can protect. Beyond covering funeral costs and final expenses, it can:

• Prevent loved ones from paying student debts or other significant loans
• Let family members continue to live in your home and pay the mortgage without your wages
• Allow children to pay for their education or perhaps continue the family business
• Provide for retirement
• Lighten financial stress while loved ones are grieving

For those who are single, life insurance can cover final and outstanding expenses and support a loved one or valued cause or charity.

It’s also helpful to think in terms of risk as well as dollars; preparation vs. premium alone.

“Life Insurance has a fixed small cost to provide peace of mind and financial security, even as things around you may be changing,” explained Todd Reimers, Assurity’s Senior Vice President and Chief Distribution Officer. “It’s constant and always present to help people through difficult times.”

Can I afford life insurance?

Life insurance is generally far more affordable than expected. According to LIMRA's 2024 Insurance Barometer Report, a 20-year $250,000 term life insurance policy for a healthy nonsmoking 30-year-old typically costs about $200 a year, or $16 a month.

However, the same survey that calculated the above cost found people guess life insurance costs 2.5 times more than its actual cost.

In reality, life insurance often costs less than a tank of gas, a few extra latte runs, or other common household expenses each month. As one looks at adding a life insurance premium to the budget, it’s also helpful to consider what the budget would look like if one household income was lost.

“Insurance coverage is a key part of financial planning, advised Kevin Faltin, Assurity’s Chief Financial Officer and Treasurer. Life insurance should be undertaken before more complicated or risky/aggressive financial planning.”

3 simple steps to get started

Here are three simple steps you can take now to ensure you're protected for the long haul.

1. Look at any current insurance plan(s) in place and what you can afford.

What do you have? Is it a term life policy with coverage for a specific span of years or a permanent policy? Is it tied to your employment, and will you lose it if you leave your job? Does your existing plan offer enough coverage when adjusted for current cost-of-living factors? What’s left unprotected? These are all questions your insurance professional can help you work through.

2. Make a plan and get started.

Start by identifying your biggest insurance need and the life insurance coverage that would protect it. Perhaps your biggest budget item is a mortgage. The right life insurance policy can give loved ones the financial freedom to remain in the family home if a parent or other wage-earner passes away. Use our handy worksheet to get a sense of how much life insurance coverage you may need.

3. Research and reach out.

You can make use of digital tools and agent expertise to learn about insurance needs and solutions. Assurity insurance professionals can find the plan you need today and for the future. You may also visit assurity.com to learn more about what we offer and how easy it is to get started.

To recap, remember, the best time to get life insurance is now.

“Protect yourself. Take action. It’s far less expensive than you imagine, and the application process has never been easier,” Reimers said.