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When Should You Buy Life Insurance?

We all want to protect our families in case the worst should happen.  When we are young, free, and single, life insurance may not be at the top of our list of priorities, but after certain life events it becomes an important asset.  Marriage, having children, and taking out a mortgage are all huge responsibilities that can put financial strain on a person should they find themselves suddenly alone.  This is especially important if you are the main breadwinner in the household, and fortunately there are many different types of life insurance to suit every budget.  Whether you wish to protect your home for your partner after your death, or ensure that your children will be provided for, life insurance can offer you peace of mind and security that will guarantee they will be taken care of after you’re gone.

Many people get confused as to when is the correct time to purchase life insurance.  After you have married, your partner will assume responsibility for you, and this includes making funeral arrangements after your death.  The funeral of a close family member can be one of the most expensive times in a person’s life, and it is wise to take steps to ensure that your partner will not be burdened.  Whole of life cover is a form of insurance that will protect you for your entire life, and is usually paid out in a lump sum in the event of your death.  Term life insurance can be taken out in the form of a policy that runs for a certain number of years.  This type of policy is perfect for those who have taken out a mortgage together, as it will provide coverage until your mortgage is fully paid off.  Failure to provide your spouse with adequate financial support after you have gone may result in them losing their home, and this becomes even more important if you have children.

Single people, or those without dependants, are not generally considered to need life insurance, but there are some exceptions to the rule.  If you have taken out a mortgage with a friend or business partner, it is worthwhile considering life insurance plans for all parties involved.  Life can be unpredictable, and it is wise to protect yourself against unforeseen circumstances.  Likewise, if you have invested in a business or project with another person where you both share the financial responsibility, some form of life insurance will protect your investment should something happen to you or your business partner.

When choosing the right life insurance policy for yourself, you will need to consider how much support your dependents will require after you have gone.  If you opt for term life insurance you can select from level or decreasing term.  Level term insurance will pay out a lump sum at any time, and can run for a period of time such as 20 years.  This makes an ideal option for those who have taken out an interest-only mortgage or have young children.  Decreasing term insurance will pay out a lump sum, but the amount will decrease over time.  This is ideal for those with older children, or those who are confident that their partner will be able to support themselves.  Whatever policy you choose, you can rest assured that your loved ones will be looked after in the event of your death, and will not struggle with financial problems during an already stressful time.

Jeff Noble has been helping people choose the right insurance policies for years. His articles predominantly appear on life insurance blogs. Find out the most popular months people purchase life insurance and why.

Peter Christopher

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