When Should You Consider Buying Life Insurance?



The rule of thumb for determining if an individual does or does not need life insurance is by answering the following questions.


  • Are you married?
  • Do you have children?
  • Would your parents and/or siblings have trouble paying for your funeral if you were to die?


If you answered “no” to all of these questions, it is quite easy to see that you do not necessarily need life insurance.


Would it be a wise investment decision to lock in a life insurance term rate now, at a younger age, then to wait until you do need life insurance?
To do this analysis, we’ll need to compare the total cost of two scenarios:


  1.  The total cost of obtaining life insurance now, at age 25 or
  2. The total cost of obtaining life insurance at age 31, an age when you will be closer to having a family. Both scenarios will involve obtaining a $1,000,000, 30 year level term policy quote





Scenario 1

Annual premium = $688 x 30 Years = $20,640 in total premiums





Scenario 2

Annual premium =$891 x 30 Years = $26,730 in total premiums ($738 current quote increased with inflation for 6 years from to simulate buying at age 31)


As you might have guessed, because you are younger in Scenario 1, the annual premium cost is less than in Scenario 2. However, we need to understand the magnitude of this difference in order to make a final decision.


As you can see on the comparison, the difference, in today’s Dollars, is approximately a $6,000 total savings by obtaining life insurance now vs. waiting until you are in your 30’s.


There is a significant amount of savings proven here as life insurance costs will increase with your age.  On a daily basis I speak with clients that are trying to obtain coverage for their parents at ages 70-80 and the cost is astounding to them.  Almost all of them say “I wish I would have done this sooner.”


When you actually break down the daily cost of life insurance, using scenario # 1, it would cost you $1.91 per day.  Think about what nominal items you purchase on a daily basis for $2.00: Coffee, snacks, something you grab at the store on the way home.  If you were to put $2.00 extra per day toward your life insurance policy your loved ones would be cared for in the event something was to happen to you.


Contact us to see if you can save money on your insurance by speaking to a professional independent insurance agent at Journey Insurance.


Let us sift through the hundreds of insurance programs to find you the most competitive rates available.  Let us do the paperwork while you spend your time doing something you actually enjoy!


Journey Insurance Agency * Irvine, California * 888.323.7480



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