Should Your Life Insurance Policy Choices Change With Age?

iQuanti: Your age is one of the primary factors that can influence how much life insurance will cost, but depending on how early you purchase life insurance and what type you have, age may or may not be a reason to change your policy choices.  

In fact, lifestyle choices and financial goals are some of the primary factors in driving life insurance policy choices.  

Term life insurance: buy at any age 

Term life insurance is designed to provide coverage for a window of time and is often purchased by parents or spouses who support others with their income. Term life insurance may also be a good option to protect your obligation to pay off a fixed loan, such as a mortgage.  

These circumstances are not directly tied to your age, but they are good reasons to get term life insurance. The length of your term life will likely depend on the length of the obligation you're trying to cover. However, the cost of the policy will be based on your age when you get it. 

The age of your beneficiaries may also influence your life insurance policy decisions. For example, some parents choose to buy term policies so that they can ensure their children are covered until they reach a certain age when they can support themselves.  

Parents who want to provide for their children indefinitely and build a larger legacy to pass on to their family may consider permanent life insurance policies. Permanent life insurance provides coverage for your entire life so long as you meet any requirements for keeping the policy. Permanent life insurance policies often offer features like cash value, which accumulates as you pay your premium and over time. 

Permanent life insurance: start sooner to get the most out of it 

Permanent life insurance is designed to provide lifelong coverage, which means once you have a permanent life insurance policy, you wouldn't necessarily need to worry about changing it. But having a permanent life insurance policy doesn't mean the terms are set in stone--many permanent life insurance policies offer flexibility in terms of how much you pay for premiums, how you want to build your cash value, and more.  

Getting a life insurance policy early in life 

The consistencies that permanent life insurance offers are designed to work in your favor over time. If you get a whole life insurance policy (a type of permanent insurance) while you're young, you won't see the premiums go up as you age or if you develop a chronic illness. 

This is one reason why it's becoming popular for parents to get life insurance policies for their young children. Once their children become independent adults, they will already have their own life insurance policies, and in some cases they don't even need to pay for the policies they have because they can use the policy's dividends to pay for their premiums.  

The bottom line 

Life insurance premiums tend to increase with age, but getting a permanent life insurance policy while you're relatively young can help lock in low premiums and allow you to build a legacy over time.  

If you think permanent life insurance may be a good option for you, it's usually better to get a policy sooner rather than later so that you can start building cash value and lock in lower premiums before your age can cause them to increase.  

Source: iQuanti, Inc.

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Categories: Insurance

Tags: financial services, insurance, life insurance