February, Sunday 03, 2019
What is the right age to buy life insurance? This is perhaps the most hotly debated life insurance topic over the years.
While many professionals believe that it is more beneficial to buy at a certain age(s), others are of the opinion that one should only start thinking of life insurance after reaching certain milestones in life like a marriage or the birth of a child.
Because of these divergent views, we have two common approaches to determining the right time to buy life insurance.
The Age-based Approach
The proponents of age-based approach to buying life insurance believe that the earlier you buy insurance the better. After all, at a younger age, the chances of developing a deadly disease that will drive your premiums high or even render you uninsurable are low.
Many people in this group believe that the right age to buy insurance is 30 years because the insurance premium is generally cheaper at 30 and below. This is because, at this age, the policy will mostly cover the protection you need. In addition,
However, the downside to buying insurance early is that future events such as marriage and raising a young family isn’t considered. For instance, if you buy an insurance policy at age 30 but get married when you are 35 years, your initial age is for you alone. It doesn’t cover your spouse.
This means that you may have to go for a top-up plan which will mean additional service fees, and charges. In some cases, you may also have to undergo more medical examinations for the top-up coverage.
The Event-based Approach
The proponents of this approach are of the opinion that one should buy life insurance after hitting certain milestones in life such as marriage or the birth of a child.
The good thing about this approach is that it allows you to buy a more comprehensive life insurance policy that protects your entire family’s need – you, your spouse, and/or child.
However, you should also consider that with age comes a higher risk of diseases that will drive up the premium or even make you uninsurable.
In addition, accidents and illness can come at any age. So it is important to buy insurance to protect you in case of an eventuality.
Buying Insurance the Nexus Way
While the approach to follow depends entirely on the individual, it is generally agreed that the earlier one buys life insurance, the better.
Logically, following the event-based approach will help you go for a more comprehensive plan and while you may pay more at a later age, you benefit more in terms of maximum protection.
However, life is full of unpleasant surprises so this approach isn’t water-tight. The age-based approach ensures you are protected in case anything happens to you even when you are still young. Moreso, it guarantees a lower premium.
That said, at Nexus Group we believe that there is no approach to buy life insurance. The most important thing is to go for a policy that is available when needed.
If you have the means to secure life insurance at an early age, go for it. The additional cost of going for a top-up as you hit certain milestones is minimal compared to the loss you will encounter should you need protection and there is none available.
Moreso, at a young age, premiums are generally lower making it quite affordable irrespective of your income level. This gives you full coverage at much lower prices.
Again, depending on the insurer, your life insurance policy may come with a Guaranteed Insurability Option, making additional coverage easy and less costly.
At Nexus, we help our clients to identify life insurance packages tailored to their individual peculiarities. Feel free to reach out to us today.