When should I buy life insurance?

Question

I'm 23, one year out of college, living at home with my parents and working full time. I have no dependents. Is this the right time in my life for purchasing life insurance? I don't anticipate starting a family for another 5-8 years - is it wise to lock in a level term or whole life at my age or is it just fool's thinking?

Answer 1

Do you have any student loans (or any other type of loan)?  Is there a co-payer?  Would the co-payer become responsible for repayment of your debt, in the case of your death?

If you said "yes" to all three questions, and you care about the co-payer, then you have a need for life insurance.  :)

Answer 2

Now. If you die who has to pay to bury you? Why dump that responsibility on your family and/or siblings when you are an adult?

Answer 3

I commend you for thinking about life insurance definitely at your age. Your one year out of college so you would have student loans and bills that you accrued as a student, correct?

If so, it would be wise for you to cover these expenses and funeral cost on the event of an early passing

God forbid, instead of your family coping with your debt and passing.

Level term insurance is the way to go and you will lock in your premium. Say for instance you have a 30 year or even a 35 year level term (only company offering 35 years is Primerica) you will be 53 or 58 when you have to renew your term. Primerica offers no medical questions upon renewing your policy and your rates were locked in @ your age when you first got the policy which was 23.

And if you did your finances right by investing in a mutual fund or a Roth IRA or 401k with your company or with Primerica, your need for insurance will be none or close to none at 58 or 53.

Start early while you have your youth and health.

With age comes sickness and trying to get insured with a terminal illness is impossible.

I hope this answered your question.

Answer 4

only you can decide which is right for you, term or whole life.   but without a doubt now is the time to purchase some sort of coverage.  if for no other reason than to guarantee your ability to maintain insurance coverage in later years.....

you will hear many arguments for term.  but again, it is your decision

Answer 5

Wait until you have dependents. The idea behind life insurance is to help your dependents cope with the sudden loss of income if you die prematurely. It’s true that you can lock in a lower rate the younger you are, but tem life insurance costs do not go up substantially until a person is turns 40 or even 50 (see article below). For example, according to the most recent survey by Insure.com, at age 30, you can get a 30-year term life insurance policy with a death benefit of $250,000 for $228 a year. At age 35, the cost of the same policy is just $250 a year. By locking in at age 30, you save $22 a year—but of course you would be paying $228 a year for five years of coverage you don’t really need.

Answer 6

Since everyday you live you are closer to death the cost rises.  Although you may not have anyone in particular to leave an inheritance you want to think about the future.  You know that you will at some time so why not purchase it while you are young and it is cheap than waiting later and it is more expensive and you are un aware of what your health condition may be. Even if you are living with your parents you should still have a small policy so it will not put them in hardship to at least bury you.  You can start out with term, but you are so young the extra few dollars may be worth the whole (a lot cheaper when you are younger)  If you want to know the different types of life insurance go to www.havingaplan.com and click life, it will lists the types the pro's and con's.

Good luck

Answer 7

It's great to see someone your age planning ahead. Starting early gives you more time to leverage the power of compounding, which, IMHO, is one of the most powerful tools we have at our disposal to secure our financial future.

Is insurance right for you? It all boils down to what your objectives are vis-a-vis your investment horizon and risk tolerance.

I am not a financial professional, and it is best to consult insurance underwriters to find out what each proposal has to offer. My thoughts on insurance would be:

1. Insurance is meant to protect against loss of income (temporary or otherwise),

2. It's cheaper to buy early,

3. You can always change beneficiaries, your underwriter can explain revocable and irrevocable

All factors being equal, I will take out a policy I can afford (ie without drastically your cash flow and/or lifestyle). The premiums would be very low given your age. You might want to consider a VUL (Variable Universal Life), a policy to comes with investment options, or an endowment, which pays out cash at a sepcified time in the future (for your wedding perhaps).

Hope this helps.

Answer 8

I dont see why not. You have a steady income and in a few years you will be considering marriage and later down the track kids. Never to soon to start.

Answer 9

I'd go with 10 to 15 year Term life Insurance Policy is cheaper.  Whole Life is not a good investment.

Answer 10

Never buy any "whole life" product unless it's for estate purposes.

Level Term (sometimes called certain) is a great way to go. Buying now protects your insurability. Not an absolute "must do", but not a bad idea either.

Good luck.

BTW: Another piece of advice I always give my younger relatives;

Never buy investment products from insurance companies or banks. Also... if a "financial couselor" suggests a "variable annuity"............... run as far away as possible.