When is the Best Time to Buy Life Insurance?

Finding the right time to buy life insurance can be tough when you have a lot going on in your life. But the right life insurance plan can make a big difference when you need it. Sometimes, pushing to do things later can cost you either money or time, or instead, waiting can help cut costs, keep reading to learn about the right time to buy life insurance and tips on saving money!

In this Article:

• Is Life Insurance Important to Have?
• What is Considered for Life Insurance?
• When Is The Best Time to Buy Life Insurance?
  • Do you need life insurance now?
  • Saving Costs 
• Is it better to buy life insurance early?
• Frequently asked questions (FAQ)

Is Life Insurance Important to Have?

Although Life insurance may not be for everyone, it is worth having life insurance if you are someone who doesn’t want to leave a financial burden on your loved ones in case of your passing. Life insurance is meant to help others in case of your death: you choose who you want to have a tax-free benefit and if you die, your beneficiary will be paid a lump sum that can be used on anything, like funeral costs, business and house up-keep, any kind of unpaid debts, and much more. To find out if life insurance is for you, read our blog about Is Life Insurance Worth It.

What is Considered for Life Insurance?

When you send an application for life insurance, the underwriting for the life insurance company looks at your application, and based on different factors, will then deny you or give you a life insurance policy with a premium you must pay. 

There are many aspects considered, including: 

• your age,
• gender, 
• Occupation and/or hobbies,
• Physical health,
• Any medical conditions you have,
• and your driving record or criminal record 

For example, see the photo below to see how these factors affect your life insurance application process. 

When Is The Best Time to Buy Life Insurance?

A lot of different things in your life can affect when it is the right time to buy life insurance. To start off, people commonly buy a life insurance policy when they have just bought a new house with a mortgage, they have started or owned a business that has financial obligations, they are the sole or primary income earner, or they have dependents and want to secure their future educational or living costs.

These are just a few of the most common reasons, but there are many more reasons to buy life insurance. It is possible that in your life right now you may not have anything previously listed, but your lives don’t stay the same or go exactly the way you expect – so, it is important to understand when in your life you should look into a life insurance policy. 

In the end, the time to buy life insurance depends on what is happening in your life, but there are different little tips and tricks to help save money by finding the right time to apply. 

Do you need life insurance now?

Trying to find out if you need life insurance can be tough at times, which is why it is important to ask yourself, “If I were to pass away, would I leave any financial burden on anyone?” If your answer is yes, then life insurance is a great option for you. 

Life insurance is usually bought when a person has any kind of debts, mortgage or business financial obligations, educational costs for yourself or your dependents, or income loss that would affect the family in the event of your death. A good way to find out if you need life insurance coverage and how much is to follow DIME standing for debts, income, mortgage, education, see the DIME formula below:

By using the DIME method above and adding up the total costs of each section, you are able to calculate the amount of life insurance coverage you would need for a life insurance policy. Basically, you are calculating the amount of a tax-free lump sum benefit that would be required to keep your loved ones and family financially stable in the case of your death. If you are interested in trying to understand the perfect coverage amount for you, check out our blog about How Much Life Insurance Do I Need in Canada.

If the DIME formula doesn’t apply to you in any way now, you should think about the future. Could there be a possibility that you will need life insurance in the near or far future? For example, term life insurance policies can range from 10 – 30 years in length so getting one now rather than later could lower your premiums, saving money. 

Saving Costs

One way to save costs when applying for life insurance, especially term life insurance policies, is by applying within 6 months of your birthday passing. By applying within 6 months after your birthday will make sure the underwriting for the life insurance company considers you at your age and not a year above your age. To learn more about this method, check out our blog about finding the right date to save money when applying for life insurance or check out other important dates to consider when applying for life insurance that can help you save on premium costs.

Additionally as mentioned before, if you know you may need life insurance in the future (for example, within a few years), you can save money by buying a 10, 20, or 30 year term life insurance policy now instead of later because a term life insurance policy tends to lock in your premium cost for the duration of the policy.

Is it better to buy life insurance early?

Short answer, yes. But it also depends on your situation: if you see a reason for having life insurance at an earlier age, such as you have a family history of medical conditions or you have started a new occupation that is dangerous, or you’ve started a family and would like to protect your children.

These are just a few common reasons why people tend to buy life insurance early, as they are looking for a way to help their families in the event that something unfortunate happens.

In general, it’s also better to buy insurance early to save on costs – the earlier you apply for a life insurance policy, the cheaper your premiums will cost and you will be able to lock that rate in, rather than waiting years later when the costs will rise with your age. For more examples of the cost comparisons of a term life insurance policy, check out our blog post on how much different term policies cost.

Frequently Asked Questions (FAQs) about Life Insurance

Thinking of buying life insurance?

Not sure when to get life insurance? No problem! We can help you figure out what the best plan for you is and when to apply. At Protect Your Wealth, we work with and compare policies and quotes from the best life insurance companies in Canada to ensure the best solution for you and your needs. We provide expert life insurance solutions, including no medical life insurance, critical illness insurance, term life insurance, and permanent life insurance to build the best package to give you the protection you need. 

If finding life insurance is something you are interested in, contact Protect Your Wealth today for free advice on finding the right life insurance policy for your needs. We are proudly based out of Hamilton, servicing clients anywhere in Alberta, British Columbia, and Ontario, including areas such as Calgary, Dundas, Waterdown, and Kelowna.