At what age should you buy life insurance?
Is it never too early or too late to buy life insurance? See how it can help you at different stages of your life. With life insurance tailored to your needs, you have peace of mind. How? ‘Or’ What? With the confidence that those you love will have financial support after your death.
Of course, you don’t know when or how you will die. But you can prepare yourself and, at the same time, protect the people who are dear to you. Are you in your twenties and just graduated? Are you 30 years old, living as a couple and have a mortgage?
Friends, are you more planning your succession in your fifties? Regardless, you probably have two things in common with everyone:
- You have loved ones in your life.
- You cannot predict the future.
It is where life insurance comes in. See how it can be helpful at various stages of your life.
With the following ten questions, we explain how life insurance can help you at different stages of your life:
- Do you need 20 year life insurance?
- What will happen if you die in debt?
- Is Your Work Life Insurance Enough?
- What type of life insurance can you consider in your twenties?
- What type of life insurance should you consider in your 30s?
- If you have insurance at work, does that mean you don’t need personal life insurance?
- Is it worth buying life insurance at 40, 50 or 60?
- What type of life insurance do you need at age 40, 50, 60 or later?
- How do you determine what is right for you?
- What can you do?
Life insurance in your twenties and thirties
1. Do you need 20-year life insurance?
You are young and healthy, but you probably already have some significant financial responsibilities. Here is what Paula MacMillan, Sun Life Financial Advisor, says: “You might have student loans or a credit card to pay, or you might be planning a wedding. In any case, it is helpful to have some protection in the event of death. ”
2. What will happen if you die in debt?
If your parents signed up with you for your credit cards or loans, they would have to pay them back. And if you assume a rent or a mortgage as a couple, your spouse will have to pay everything with their salary alone.
With life insurance, your family will have a death benefit * that they can use to pay for expenses you incur.
(* The amount paid to your loved ones on your death.)
“In general, people do not think about life insurance before their thirties, says M me MacMillan. Still, if someone is dependent on you, it might be best to think about it sooner. You wouldn’t want to leave this person in financial trouble later on. ”
3. What type of life insurance can you consider in your twenties?
It’s never too early to protect your family with life insurance. But there’s another good reason to think about it in your twenties: it costs less.
Your premium – the monthly or annual cost of your life insurance – is determined by:
- your age;
- the sex assigned to you at birth;
- The lifestyle;
- your medical history;
- your current state of health.
“If you’re healthy in your twenties, you fall into the low-risk category. So you pay a lower premium, “explains me, MacMillan.
The two most common types of life insurance are:
- term life insurance
- permanent life insurance
M me MacMillan advises people in their twenties who start their career to opt first for term life insurance. As the name suggests, this insurance provides temporary coverage. In addition, it can be renewed every 10, 15, 20 or even 30 years, depending on the contract.
“Term life insurance is much more affordable [than permanent life insurance] for young people who are just starting,” she says. You will be able to get good coverage at a low cost. “
You could also get a trim, reasonably priced permanent life insurance policy to supplement your term insurance. Here, your young age matters.
Permanent coverage costs you more. However, the younger you are, the lower the premium. Permanent life insurance protects you more than just term insurance (we’ll get to that later). Having some in your twenties is a great way to build a solid financial foundation for your future.
4. What type of life insurance should you consider in your 30s?
Your financial situation will likely change as you get older. In your 30s, you may have:
- dependent children;
- a mortgage payable;
- other costs to be borne.
“My advice remains about the same, however, says M me, MacMillan. It would help if you bought as much life insurance as you can. “
However, if you already have term life insurance, consider changing your contract. “Most contracts allow you to turn your term life insurance into permanent life insurance,” she explains. It costs more, but permanent insurance offers long-lasting financial protection in the event of death. “
It’s also more profitable in the long run. “The cost of permanent life insurance is usually fixed. However, the premium for term life insurance increases – sometimes radically – each renewal, “adds me, MacMillan. The younger you are when you buy permanent life insurance, the lower the premium.
Permanent life insurance is more expensive than term insurance initially. However, the premium does not generally increase over time. So it ends up costing you less – after a few term life insurance renewals.
5. Is your work-life insurance sufficient?
Many in their thirties have jobs that provide them with benefits, including life insurance. “I often encourage people to make the most of the assurance they have to work, reports M me MacMillan. Up to a certain amount of coverage, there are no questions or medical requirements. It also costs less because there is a whole group of insureds. ”
6. Does this mean you don’t need personal life insurance?
“It’s good to have confidence at work. But I always remember that nowadays, job security diminishes, says M me MacMillan. When you leave an employer, you also leave the plan they provided to you. Hopefully, your next job will offer you comparable or better insurance. “
In addition, there is no law obliging an employer to offer life insurance. “So you need to see your insurance at work as a supplement to your protection,” recommends Ms MacMillan. That way, no matter what happens at work, you can count on your coverage. “
Life insurance from quarantine
7. Is it worth buying life insurance from the age of 40?
It all depends on the insurance company and the product you plan to buy. Some insurers offer contracts with age limits between 60 and 85 years old. “The price will not necessarily be advantageous. But as long as your health is good, you might enjoy these contracts as needed, “says M me MacMillan.
8. What type of life insurance do you need at age 40, 50, 60 or later?
You probably want to plan more for your retirement or your estate at this point in your life. Then surely, you need more financial stability and protection.
M me MacMillan recommends considering permanent life insurance for the following reasons:
- Depending on your contract, the cost of your insurance may not increase.
- You could pay premiums for a limited time and then never again.
- Your family or other beneficiaries receive a tax-free amount after your death.
- Some permanent life insurance contracts provide for the payment of dividends. You can then:
- use the money to increase the death benefit;
- use it to pay your premiums;
- cash it.
9. How do you determine what is right for you?
Insuring on life is a good idea, regardless of your age. And leaving financial protection for your family could be your most significant show of generosity. But where to start? When taking out a contract, you must take into account:
- your current situation;
- your personal goals;
- what your means allow you.
“Apart from the temporary and permanent insurance, other types of life insurance might fit with your goals,” says M me MacMillan.
Or, consider combining term life insurance with permanent life insurance.
For example, you could buy 30-year term insurance to protect your family during the life of your mortgage. Alternatively, you could apply for permanent life insurance to keep protection when your term insurance ends.
The money paid for your life insurance is not taxed or integrated into your assets *. It can therefore help reduce the tax burden on your heirs.
(* Provided you designate a beneficiary and don’t let the money default to your estate.)
10. What can you do?
Here are three easy ways to determine or meet your life insurance needs:
- Use our life insurance calculator to see what protection you may need.
- Apply for term life insurance online: Get a personalized quote.
- Talk to a Financial advisor. He will be able to :
- explain the options available to you;
- answer your questions;
- help you integrate life insurance into your overall plan.
Most advisers can now be consulted by video conference. Find an advisor today.
This article is intended to provide general information only. We do not provide legal, accounting, tax or other professional advice. If necessary, please consult a specialized professional who will thoroughly examine your legal, accounting, and tax situation.