When Experts Say You Should Get Life Insurance
If you’ve been researching when to get life insurance, you’ve come to the right place. Here, we’ll review three times during your life when you should consider getting a policy. Plus, we’ll cover how often you should reevaluate a policy that’s already in place.
When you’re young and healthy
This may surprise you, but if you’re young and healthy, it’s wise to get a life insurance policy. That’s because younger, healthier people usually can get better rates. And, once you lock in a lower premium rate, it won't change for the term of the policy — or even for life in some cases — allowing you to save money for years on insurance.1 You may have more to protect than you realize, anyway. Young people may want to buy life insurance to protect their loved ones and even to leave a legacy for others.
Everyone’s situation is unique. Maybe you aren't sure if you should get life insurance now, but it never hurts to talk to a licensed insurance representative to find out. Plus, looking into getting a policy doesn’t cost you anything.
“Very often, when people start looking into life insurance, they realize they have more to protect than they initially thought,” says an Amica National Life Sales Representative. Having the conversation with a licensed representative can help you see areas of your life that you need to protect. “Most people feel so much better once they learn more.”
Here are a few specific instances when young people may want to consider getting a policy:2
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You’re planning to get married and have kids.
Planning early for the financial protection you’ll want later in life for a spouse or child can typically help you secure a better monthly premium. Rates are normally based on your age and health. This means younger, healthier people can usually get a better rate that lasts for years — or, depending on the type of policy, life.3
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You’ve cosigned on a loan.
Do you have a private student loan or mortgage that’s cosigned? If you pass away, your cosigner is left with your debt. But if you have a life insurance policy, it can help pay off the remaining portion without leaving a burden with your cosigner.
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You have loved ones who depend on you.
Who depends on you financially? Maybe it’s aging parents or siblings. Have you thought about what your loved ones would do if you were no longer here? It’s not uncommon for people to buy life insurance to care for aging parents.
If you’re single and pass away, it can have a lasting impact on the people who care about you. Depending on your personal situation, you may want to help financially protect your loved ones by purchasing insurance.
When you get married
Traditionally, this is when most people buy life insurance. Committing to a partner can bring up conversations about financial planning, property and more. And very often, a couple’s bank accounts — and debt — are intertwined. If you’re engaged or committing to someone, it may be beneficial to get a life insurance policy now.
A life policy can help cover:
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A mortgage:
Life insurance can help ensure your partner can afford to stay in your home for years to come.
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Outstanding debts:
In 2021, the average student took out $40,904 in loans.4 If you have student loans or other debt, your policy can assist with paying them off. This can help alleviate financial stress after a loss.
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End-of-life expenses:
The average cost of a funeral and burial is $7,848.5 Your life insurance policy can cover these costs, so your partner isn’t saddled with them.
It’s best to talk to a life insurance representative to find out which type of policy is best for you. Experts generally recommend a life insurance policy that’s at least seven to 10 times your income. It should also take into account any future expenses you anticipate, like a new home or children.6
When you have a baby
Thinking about expanding your family? Then you should look into getting life insurance as soon as you’re considering having a baby. If you’re already expecting, applying for life insurance early in your pregnancy is recommended because you can often lock in a better rate. Even if a pregnancy-related health condition arises later, your rate won’t change. A life policy can financially protect your loved ones by helping to cover:
- A mortgage, so your family can stay in your home after you’re gone
- Your children’s future education
- Childcare expenses, including day care or a nanny
- A legacy, if you’d like to leave your family with additional financial support
- Day-to-day life expenses, like tutoring, transportation, school lunches,educational trips and more
Keep in mind, if you’re growing your family from one child to two, your current policy may not be enough. It’s worth talking to a licensed insurance agent to find out if you need to get a larger one now that your second child is on the way.
When you should reevaluate your current life insurance policy
The quick answer? You should reevaluate your policy periodically.
Your life can change day-to-day and very subtly. It’s important to check in with an agent frequently to make sure your life insurance still meets your needs. Try to review your policy at least once a year to make sure you have enough coverage.
At a minimum, review your coverage when you approach a major milestone, like:
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Marriage:
You’ll want to financially protect your spouse or partner if you pass away. After all, you don’t want to leave them with a mortgage, student loans or other debt, especially without your income.
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Purchasing a new home:
Enabling your loved ones to remain in the home that you shared can offer peace of mind. Life insurance can help cover the cost of the mortgage so that your family doesn’t have to move.
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A new baby:
Your children need to be provided for, even after you pass away. Life insurance can help secure their standard of living, even if your income is no longer available.
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Sending children to college:
Education can set your children up for success, and life insurance can help pay for their tuition even if you are gone.
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Changing jobs:
Many companies offer life insurance to their employees. But if you change jobs, you probably can’t take your policy with you. The next time you switch employers, look into your life insurance options, even outside of work. You may want to purchase supplemental insurance, especially if your salary increases.
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Retirement:
Many people work part time to cover expenses after they retire. Life insurance can help cover your lost income should you pass away. It can also pay for end-of-life expenses, as well as care for aging parents and adult children.
As you reevaluate your policy, you may consider adding coverage. You may also want to purchase more than one life insurance policy. An example is a business owner who purchases one policy to cover family members and another policy to help pay off business loans.7
Above all, remember, it doesn’t cost to look into life insurance. A little research can also give you peace of mind. You’ll learn what coverage you need and make sure you’re on track.
Want to learn more about Amica life insurance?
1 What You Should Know About Buying Life Insurance, American Council of Life Insurers, 2022.
2 Why Single People Need Life Insurance, lifehappens.org, 2021.
3 Interview with Amica National Life Sales Representative, 2022.
4 Student Loan Debt: 2021 Statistics and Outlook, Investopedia, 2022.
5 How Much Does a Funeral Cost?, Forbes, 2022.
6 Life Insurance for Newlyweds, Policygenius, 2020.
7 Can You Have More Than One Life Insurance Policy?, Nerdwallet.com, 2022.
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ALIC82122 Jan-27