The Cost of Waiting to Buy Life Insurance: Why You Shouldn’t Procrastinate

Talk to one of our experienced advisors, today!

18 Minute read

Originally published: May 8, 2023

Impact of Procrastination Life Insurance in Canada

Talk to one of our experienced advisors today!

18 Minute read
Originally published: May 8, 2023

Impact of Procrastination Life Insurance in Canada

Life insurance is a crucial part of financial planning, yet many people put off purchasing it until later in life. Waiting too long to buy life insurance can have serious consequences, including higher premiums, denial of coverage, and leaving your loved ones without financial protection in the event of your death. In this blog, we will explore the importance of life insurance, how it works, the factors that impact life insurance premiums, and the risks and misconceptions associated with procrastination.

We will also provide strategies for getting the best life insurance rates and tips for making an informed decision about your life insurance needs. Whether you are young and healthy or approaching retirement, this blog will provide valuable information to help you make an informed decision about life insurance and avoid the risks of waiting too long.

A Life Insurance Case Study: The Cost of Procrastination

Can I get life insurance if I am pregnant?

Meet Sarah, a 37-year-old project manager who has always been in good health. She is married with two young children and has a mortgage and car payments to make each month. Sarah has always known that life insurance is important, but she has been busy with work and family responsibilities and hasn’t gotten around to purchasing a policy.

Last year, Sarah started experiencing some unusual health symptoms and went to the doctor for a check-up. After a series of tests, she was diagnosed with a serious medical condition that requires ongoing treatment. When Sarah tried to purchase a life insurance policy after her diagnosis, she was shocked to find that her premiums were much higher than she had anticipated. In fact, some insurance companies refused to provide her coverage altogether.

Sarah realized that she had made a mistake by waiting to purchase life insurance. By delaying, she had put herself at risk of developing a health condition that would make it more difficult and expensive to obtain coverage. She also recognized that she had left her family vulnerable to financial hardship if something were to happen to her.

Don’t let this happen to you. Whether you are young and healthy or have pre-existing health conditions, purchasing life insurance sooner rather than later can provide peace of mind and financial security for you and your loved ones.

What is Life Insurance and How Does It Work?

Life insurance is a contract between you (the policyholder) and an insurance company. In exchange for regular payments (called premiums), the insurance company agrees to pay a lump sum of money to your beneficiaries upon your death. This money is often referred to as a death benefit, and it can help your loved ones pay for things like funeral expenses, outstanding debts, or daily living expenses.

There are several different types of life insurance policies, but the two main categories are term life insurance and permanent life insurance.

  • Term life insurance is a policy that provides coverage for a specified period of time, typically between 1 and 30 years. If you die during the term of the policy, your beneficiaries will receive the death benefit. If you outlive the term of the policy, the coverage ends and you won’t receive any benefits.
  • Permanent life insurance, on the other hand, provides coverage for your entire lifetime. This type of policy is more expensive than term life insurance because it offers lifelong coverage and includes a savings or investment component. There are several different types of permanent life insurance policies, including whole life, universal life, and variable life.

When you apply for life insurance, the insurance company will evaluate your health and lifestyle factors to determine your premiums. This process is called underwriting, and it helps the insurance company assess the level of risk you pose as a policyholder. Factors that can affect your premiums include your age, gender, health history, occupation, hobbies, and whether you smoke or use tobacco products.

Why is It Important to Have Life Insurance?

Now that we’ve explored what life insurance is and how it works, you may be wondering why you even need it in the first place. Well, the truth is that life insurance can provide critical financial protection for your loved ones, as well as peace of mind and estate planning benefits. In this section, we’ll take a closer look at why it’s so important to have life insurance, including how it can provide a safety net for your family, protect your business, and even save you money in the long run.

Can I get life insurance if I am pregnant?
  1. Financial Protection for Your Loved Ones: The primary reason to have life insurance is to provide financial protection for your loved ones in the event of your death. The death benefit paid out by the insurance company can help cover expenses such as funeral costs, outstanding debts, and daily living expenses. Without life insurance, your loved ones may struggle to pay for these expenses on their own, especially if you were the primary breadwinner in your household.
  2. Peace of Mind: Knowing that you have life insurance can provide peace of mind for both you and your loved ones. Life is unpredictable, and having a plan in place to provide for your loved ones if something were to happen to you can give you a sense of security.
  3. Estate Planning: Life insurance can also be an important tool for estate planning. If you have significant assets that you plan to leave to your heirs, life insurance can help cover any estate taxes that may be owed, allowing your heirs to inherit more of your estate.
  4. Business Protection: If you own a business, life insurance can be used to protect the business in the event of your death. For example, a life insurance policy can be used to buy out your share of the business from your heirs or to cover the costs of finding and training a replacement.
  5. Health Concerns: Finally, it’s important to consider the potential impact of any health concerns you may have on your ability to obtain life insurance. If you have a pre-existing medical condition, you may be deemed a higher risk by the insurance company and may have to pay higher premiums or may not be able to obtain coverage at all. By getting life insurance earlier in life, before any potential health issues arise, you can ensure that you have coverage in place regardless of your health status.

How Does Waiting to Buy Life Insurance Affect Your Premiums?

Waiting to buy life insurance can have a significant impact on your premiums. If you wait until you’re older to buy life insurance, your premiums will likely be higher. This is because as you age, your risk of developing health issues or passing away increases, making you a higher risk for the insurance company. Additionally, if you have any pre-existing medical conditions, waiting to buy life insurance can be particularly costly, as you may be required to pay higher premiums or may not be able to obtain coverage at all.

The longer you wait to buy life insurance, the more expensive it will likely become. For example, if you wait until you’re in your 50s or 60s to buy a policy, your premiums could be several times higher than they would be if you had purchased the same policy in your 30s or 40s. This can add up to significant costs over the life of the policy.

What Factors Determine Your Life Insurance Premiums?

Several factors can determine your life insurance premiums. These factors include:

  1. Age: Generally, the younger you are when you purchase life insurance, the lower your premiums will be.
  2. Health: Your overall health, as well as any pre-existing medical conditions, can impact your premiums. If you’re in good health, you may be able to qualify for lower rates.
  3. Lifestyle: Your lifestyle habits, such as smoking, drinking, and engaging in high-risk activities, can also impact your premiums. These habits may increase your risk of developing health issues or passing away, leading to higher premiums.
  4. Coverage amount: The amount of coverage you need can also impact your premiums. Generally, the more coverage you require, the higher your premiums will be.
  5. Term length: The length of your policy can also affect your premiums. A shorter term policy may have lower premiums, but a longer term policy can provide more coverage and potentially save you money in the long run.
  6. Occupation: Your occupation can also impact your premiums, as some jobs may be considered higher risk than others.
  7. Gender: In some cases, gender can also affect your premiums. Women may be able to obtain lower rates than men, as they tend to live longer on average.

Overall, it’s important to understand that insurance companies use a complex set of algorithms and risk assessments to determine premiums, and each company may weigh these factors differently. It’s important to shop around and compare quotes from multiple insurers to find the best coverage and rates for your needs.

Can I get life insurance if I am pregnant?

How Much Can Waiting to Buy Life Insurance Cost You in the Long Run?

Waiting to buy life insurance can cost you significantly in the long run. The longer you wait to purchase life insurance, the higher your premiums are likely to be. This is because age is one of the most important factors in determining life insurance premiums. As you age, your risk of developing health issues or passing away increases, and insurance companies factor this increased risk into their premium calculations.

For example, let’s say a 30-year-old male non-smoker purchases a 20-year term life insurance policy with a $500,000 death benefit for a premium of $20 per month. If he waits until he is 40 years old to purchase the same policy, his monthly premium could increase to $30 per month. If he waits until he is 50 years old, the premium could jump to $70 per month or higher. Over the 20-year term of the policy, waiting to purchase life insurance could cost thousands of dollars in additional premiums.

In addition to higher premiums, waiting to buy life insurance can also put your loved ones at risk if something were to happen to you. Without life insurance, your family may struggle to pay for expenses such as funeral costs, outstanding debts, and daily living expenses. Purchasing life insurance earlier in life can provide peace of mind and financial protection for your loved ones.

What Are Some of the Risks of Waiting Too Long to Buy Life Insurance?

Waiting too long to buy life insurance can expose you and your loved ones to several risks:

  1. Higher premiums: The longer you wait to buy life insurance, the higher your premiums are likely to be.  Insurance companies factor this increased risk into their premium calculations, which means that the cost of premiums can rise significantly as you get older.
  2. Health issues: As you age, you may develop health issues that can make it more difficult to obtain life insurance or that can result in higher premiums. Some health issues, such as high blood pressure or diabetes, may be manageable with treatment, but they can still affect your insurability. Waiting too long to buy life insurance can increase the risk that you will develop health issues that could make it harder or more expensive to obtain coverage.
  3. Inadequate coverage: If you wait too long to buy life insurance, you may end up with inadequate coverage. This can happen if you develop health issues or if you simply don’t purchase enough coverage to meet your needs. Inadequate coverage can leave your loved ones at risk of financial hardship if something were to happen to you.
  4. Unforeseen events: Life is unpredictable, and waiting too long to buy life insurance can leave you and your loved ones vulnerable to unforeseen events. Accidents, illnesses, and other unexpected events can happen at any time, and without life insurance, your family may struggle to pay for expenses such as funeral costs, outstanding debts, and daily living expenses.

In summary, waiting too long to buy life insurance can lead to higher premiums, health issues, inadequate coverage, and vulnerability to unforeseen events. It’s important to consider purchasing life insurance as early as possible to ensure that you have coverage in place to protect yourself and your loved ones.

Can You Still Get Affordable Life Insurance if You Wait Until Later in Life?

It is possible to still get affordable life insurance later in life, although the cost of premiums generally increases as you get older. Factors such as age, health, the type of policy you choose, and your lifestyle can all affect the cost of your premiums. Since age and health factors from your age are a large factor in determining premiums, the cost and impact of procrastinating your life insurance application only gets steeper as you get older. 

However, even if you have health issues or are an older adult, there are still options available for obtaining affordable coverage. By choosing a policy that fits your budget and needs, making lifestyle changes if necessary, and working with a reputable insurance provider, you can help ensure that you are getting the most affordable coverage possible.

Do Health Conditions and Lifestyle Choices Affect Your Life Insurance Rates?

Your health conditions and lifestyle choices can have a significant impact on your life insurance rates. 

If you have a pre-existing medical condition or a history of serious illnesses in your family, you may be deemed a higher risk by the insurance company, which can lead to higher premiums. Similarly, if you smoke or use tobacco products, you may also face higher rates due to the increased health risks associated with tobacco use.

On the other hand, if you have a healthy lifestyle, such as exercising regularly, maintaining a healthy weight, and eating a balanced diet, you may be eligible for lower rates. Some insurance providers offer incentives for healthy behaviors, such as discounted rates for gym memberships or wellness programs.

What Are Some Strategies for Getting the Best Life Insurance Rates?

Here are some strategies for getting the best life insurance rates:

  1. Shop around: One of the best ways to ensure that you are getting the best rates is to shop around and compare policies from different insurance providers. You can use online comparison tools or work with an independent insurance agent to help you find the best rates and coverage options.
  2. Improve your health: As we mentioned earlier, your health plays a significant role in determining your life insurance rates. Making healthy lifestyle choices, such as quitting smoking, exercising regularly, and maintaining a healthy weight, can help you qualify for lower rates.
  3. Consider term life insurance: Term life insurance policies generally offer lower premiums than permanent life insurance policies. If you only need coverage for a specific period of time, such as while you’re paying off a mortgage or while your children are still dependents, a term policy can be a cost-effective option.
  4. Choose the right coverage amount: It’s important to choose a coverage amount that meets your needs without over-insuring yourself. A higher coverage amount will generally result in higher premiums, so it’s important to strike a balance between the coverage you need and what you can afford.
  5. Opt for automatic payments: Some insurance providers offer discounts for customers who sign up for automatic payments. This can be a simple way to save money on your premiums over time.

By following these strategies, you can help ensure that you are getting the best life insurance rates possible. Remember to do your research, be honest about your health and lifestyle, and work with a reputable insurance provider to find the right coverage for your needs and budget.

What Are Some Common Misconceptions About Life Insurance and Procrastination?

Here are some common misconceptions about life insurance and procrastination:

  • “I’m young and healthy, so I don’t need life insurance yet”: This is a common misconception that can be costly in the long run. The younger and healthier you are when you purchase life insurance, the lower your premiums will be. Waiting until you’re older or have health issues can result in higher premiums or even denial of coverage.
  • “I have life insurance through my employer, so I don’t need to purchase additional coverage”: While it’s great to have life insurance coverage through your employer, it’s important to consider whether that coverage is enough to meet your needs. Employer-sponsored policies may have lower coverage amounts or limited options for customization. Additionally, if you leave your job, you may lose that coverage.
  • “I don’t need life insurance because I don’t have any dependents”: While having dependents is a common reason to purchase life insurance, it’s not the only reason. Life insurance can also be used to cover funeral expenses, pay off debts or mortgages, or leave a legacy for loved ones.
  • “I’ll just wait until I’m older and have more money to purchase life insurance”: This is a dangerous misconception that can be costly in the long run. Waiting too long to purchase life insurance can result in higher premiums or even denial of coverage if you develop health issues. Additionally, unforeseen events can happen at any age, and it’s important to have a plan in place to protect your loved ones.

By understanding and avoiding these common misconceptions, you can make informed decisions about your life insurance needs and avoid procrastinating on an important aspect of financial planning.

Life insurance is a crucial part of financial planning, and waiting too long to purchase it can have serious consequences. By procrastinating on purchasing life insurance, you risk facing higher premiums, denial of coverage, and leaving your loved ones without financial protection in the event of your death. It’s important to understand the factors that impact life insurance premiums, such as age, health, and lifestyle choices, and to shop around to find the best rates and coverage options. Don’t fall victim to common misconceptions about life insurance and procrastination. Take action now to secure the financial future of yourself and your loved ones.

Frequently Asked Questions (FAQs) about Procrastination and Life Insurance

There’s no one-size-fits-all answer to this question, but in general, it’s a good idea to buy life insurance when you’re young and healthy. This is because premiums are typically lower for younger, healthier individuals. However, if you have dependents or significant financial obligations, it’s never too late to buy life insurance.

Yes, you can still get life insurance if you have a pre-existing medical condition. However, you may have to pay higher premiums or choose a policy with more limited coverage. It’s important to shop around and compare policies from multiple providers to find the best coverage for your needs and budget.

If you die without life insurance, your loved ones may struggle to cover expenses such as funeral costs, outstanding debts, and daily living expenses. This can put them in a difficult financial situation during an already stressful and emotional time. Life insurance can provide a safety net for your loved ones in the event of your death.

Yes, you can typically change your life insurance policy after you’ve purchased it. For example, you may be able to increase or decrease your coverage, change your beneficiaries, or switch to a different type of policy. However, it’s important to note that making changes to your policy may affect your premiums.

To get the best life insurance rates, it’s important to shop around and compare policies from multiple providers. You should also consider factors such as your age, health, and lifestyle when choosing a policy. Additionally, you may be able to save money on premiums by choosing a policy with a longer term or by paying your premiums annually instead of monthly.

Find a solution for what you’re looking for

Ultimately, purchasing life insurance sooner rather than later is a wise decision that provides peace of mind and financial security for you and your loved ones. 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. 

To schedule a consultation about your income protection goals, or if you have any questions about insurance in Ontario or Canada, please contact Protect Your Wealth or call us at 1-877-654-6119 to talk to an advisor today! We’re proudly based out of Hamilton, and service clients anywhere in Ontario, British Columbia and Alberta including areas such as Kingston, Oakville, Grande Prairie, and Victoria

Talk to an advisor today.

Best Life Insurance Quotes Canada