Many of us don’t even think about the need for term life insurance until we’re well into our thirties. There’s just something about having a two as the first digit in your age gives you the illusion of immortality. Yet, for those of us who have families, or plan to have families, the younger we are when we buy our term life insurance, the better price we’re going to get.
Of course, there are some term life insurance policies whose premiums go up every year as you get older. But most people don’t purchase these kinds of policies. And frankly, most people shouldn’t. For most people, a twenty or thirty year level term insurance policy makes more sense than anything else.
With level term insurance, you determine (with your agent’s help) how much coverage you need to cover the financial loss to your family if you should die during the term. The premium is set according to whether or not you use tobacco products, whether you have a dangerous career or hobbies, your health and, most importantly, your age. In most cases, your age is the largest determining factor is the cost of your life insurance.
Statistically, most people become parents at an average age of 25 – which is smack dab in the middle of our invulnerable stage. While it’s true that most of us will make it through our 20s in good shape, with plenty of vigor left for that mid life crisis in the late 30s and early 40s, the fact is that some us won’t. People do die in their 20s, both by accidents, disease, and every other conceivable form of death, up to and including the infamous “cause unknown.” And while we are young, our children generally are, too. In a nutshell, our families stand the risk of losing our incomes when they will need it the most, for raising and providing for children.
The truth of the matter is that you need life insurance more when you are young than you will while you are old. While it’s true, most of us won’t die until we’re well into our 70s, by then there shouldn’t be anybody depending on us and our large bills (i.e., a mortgage) should be paid off, so we really won’t need life insurance, except maybe enough to help defray the cost of burying us. Unless of course, those adorable toddlers we’re raising now are still living at home in their mid 40s.
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