LIFE INSURANCE: The earlier, the better!
Life insurance is not an immediate concern or priority when you are young or do not have a family. Often, the idea of financially preparing for the future is limited to diligently setting aside money in the bank. Modern lifestyles are also highly dependent on latest technological advancements, and much of your disposable income goes to acquiring the newest gadget that’s available in the market.
This is all well and good, but life insurance as a financial safety net is an incredibly wise option—and an even better investment when purchased at an earlier age, because the premiums (or the amount you agree to pay to keep the life insurance policy active) are typically much lower. This all has to do with risk assessment.
Before we go into how risk assessment plays into computing your premiums, here’s a brief refresher on how life insurance works: life insurance functions as financial protection for your family’s future. This is especially important if you are a breadwinner, so your family or other beneficiaries are protected.
So how exactly is your coverage determined? It’s all up to you. Life insurance companies typically offer life insurance products that provide different coverage amounts. A thorough discussion with your agent will help you come up with an amount that you believe will be most helpful to your family. The higherthe life insurance coverage (and the more benefits) you opt for, the higher the premium will be.
Going back now to the subject of risk assessment—younger individuals usually end up with relatively lower premiums than those who belong to an older age bracket, even if the coverage amount is the same. This is mainly because the younger you are, the healthier you are assumed to be. Naturally, as we age, we become exposed to more health risks, which can be further compounded by certain lifestyle choices if we are not mindful. It is also sometimes more difficult to get approved for a life insurance policy when we’re older, as high-risk health concerns (i.e. heart disease, diabetes) have a higher chance of occurring at a latter age.
There are, of course, other factors to consider when premiums for life insurance policies are computed. But as with anything that could be potentially life-changing, it’s never too early to start planning and setting safety nets in place. If you want to get started on yours, feel free to contact us. We are only happy to help you find the life insurance product that will best serve your future needs.