Imagine for a moment that you’re significantly older than you are now: ten years older, twenty years older, maybe thirty or forty years older. Imagine that you have family – maybe you already do. You might imagine that you earning a good amount of money, money your family depends on. Or maybe you imagine that by this age you’ll be retired, living off of your savings and determined not to become a financial burden to the people that you care about most. Then imagine that you have become ill, or have had some other thing happen that increases the likelihood that you’ll pass away soon.
In this situation, would you want life insurance?
You will almost certainly agree that you would. In the hypothetical, you’re older and sicker than you are now, and you may not have long; and you don’t want your family to lose your income or have to dip into their savings or their inheritance to cover funeral costs. It’s a no-brainer. You’ll get the insurance and, when you pass, the insurance will give your loved ones financial security.
You’re absolutely right that that’s how life insurance works – it will protect your family when you pass. And you’re absolutely right to think that life insurance is a good idea for this hypothetical version of you, who is older and sicker than you are now.
But here’s the thing: if you want life insurance then, you’re going to want to get it long before you become old and sick. You’re going to want to get it as soon as possible. You’re going to want to get it now.
Just a hypothetical
Our hypothetical was just that: a hypothetical. All we did was replace your current self with a version more likely to pass away. When we did, it was easy to see how important life insurance is.
And your health and age are certainly important when considering life insurance (life insurance companies consider these factors when pricing your policy, too, as we’ll discuss shortly). If you’re sixteen years old with no children and no income, you probably don’t need a life insurance policy, and that’s okay! But it’s also true that your situation doesn’t need to be nearly as extreme as in our hypothetical for you to need life insurance. Our hypothetical makes the benefits more obvious, but there’s a good chance that you could use life insurance right now.
Because, again, our imaginary you was a hypothetical. You may be older and sicker in a few decades. You also may be perfectly healthy (but still older – sorry). And, though it’s tough to think about, you may not be here at all. You may die before your situation becomes as clear as in our hypothetical, and if you don’t have life insurance, that means your family won’t get help handling the loss of your income or the costs of your funeral. If you wait until your health deteriorates to invest in life insurance, you’ll be at risk of abandoning your family due to sudden and unforeseeable dangers – immediate health problems like heart attacks, for instance, or sudden dangers like car accidents.
When you choose to get life insurance is up to you, and will depend on your risk levels and where you are in your life’s story. But here’s a good rule of thumb: if you’ve read this far in an article about life insurance, you’re probably ready to get some right now. You might be reading because you’ve gotten married. Maybe you’re reading because you’ve had a child. Whatever the situation, the thing that urged you to look up life insurance and research it is telling you something: it’s likely time to invest in a policy.
Lock in your rate
In our hypothetical, we could see clearly that future you was likely to pass away and take advantage of his or her policy. The insurance company was quite likely to have to pay out some cash to future you’s loved ones to cover funeral costs, loss of income, and other possible expenses. That’s all easy to see – and the insurance companies can see it, too!
If insurance companies charged low rates to high-risk folks, they would lose lots of money and go out of business (and we’d all be in big trouble, because we wouldn’t be able to get insurance)! So, naturally, people that come to life insurance companies when they’re old and sick will find that they have to pay higher rates.
That’s another reason that it makes sense to get life insurance sooner rather than later. Current you is a lot healthier and younger than the future you in our hypothetical. And, depending on your insurance company and policy, you may be able to lock in a rate based on your current health. Your insurance company will give you a lower rate than they would to an older, sicker person, and they’ll likely offer you the chance to lock in that rate in exchange for a commitment of some number of years. Your insurance company is betting that healthy, youthful you will stay healthy (if not youthful) through the length of the policy. It’s a bet you’ll hope to lose, so that you can enjoy the peace of mind of having life insurance without, you know, dying. But if you get unlucky and come down with a terrible illness, you won’t find yourself paying for cancer care and obscenely high life insurance rates at the same time – your contract will protect you, keeping your rates low even as your risk skyrockets.
With some luck, it will be a long time before you need the type of life insurance offered by life insurance companies and life insurance brokers like Our Life Covered. But there’s no substitute for the peace of mind that comes with having it. If you invest in life insurance now, you can protect your financial future by locking in a lower rate for as long as possible. And, of course, you’ll be caring for your family – ensuring that whether you die far down the line or in the blink of an eye tomorrow, they’re as financially protected as they can be. It’s never to early to do that.