At IBUSA, we specialize in no-exam life insurance, so no matter when the right time to buy life insurance for you is, we can get you covered quickly and easily with the help of one of the many companies we represent. Now, for the majority of people, life insurance is one thing that many know they should buy, but they’re not sure “when” they should.
This is why we wanted to take a moment and list the top 10 “life events” that commonly cause someone to decide to purchase a life insurance policy. Then from there we’ll provide some tips on what to look for in a life insurance policy based on the need to shop for coverage.
So, let’s get right to it!
Top 10 Events Signalling It is Time to Buy Life Insurance
#1. They said… “I do!”
That’s right; one of the most common reasons why someone might choose to purchase a life insurance policy on him or herself is because they have either recently become engaged or are not “officially married”.
In situations like these, our number one suggestion is first to make sure that you choose a policy that you will be able to comfortably afford, and second, make sure that you choose a policy that will last for a good amount of time, like a 30 or 40 year term life policy.
The reason for this…
It is because newlywed couples will likely be going through a lot of changes, many of which may be quite expensive, and having an expensive policy in place that may place a financial strain on your relationship is not a good idea.
Plus, the last thing that you want to find yourself doing is canceling a term insurance policy a few years from now simply because you need to cut back on your household expenses.
As for longevity…
Well, that’s simply because most newly married couples tend to be on the “younger side” and will tend to have considerable insurance needs for quite some time to come.
#2. It’s sold!
Congratulations, you just bought a house. Or should we say, you just became the owner of a 30-year mortgage? Either way, purchasing a new home is another major reason many folks will consider purchasing a life insurance policy for the first time and why a 30-year term life insurance policy may be a great option.
In cases like these…
We typically recommend that an individual purchase a term life insurance policy equal to or just less than the repayment schedule for the loan on the home with a death benefit equal to or just a bit less than the total money owed on the home. This way if you do die before the home is paid off, your loved one ought to receive enough money from your insurance policy so that they won’t need to worry about any remaining debt left on the home.
#3. It’s a boy!
Having a baby is another major reason someone might purchase a life insurance policy. In cases like these, one should think long and hard about exactly how much life insurance they will need and how long they would like to have the coverage in place. You can use a life insurance calculator to get a good idea of how much coverage you actually need.
In our experiences here at IBUSA, we’ve found that when folks seriously consider their actual needs, they are often quite more than they initially thought. Questions you should ask yourself when trying to determine how much coverage you should buy should include:
- If I died tomorrow…
- How much income would my family lose over the next 20 to 30 years?
- Would I want my family to be able to stay in our current home?
- Do I want my child’s education paid off when I die?
- If my partner isn’t working now, would I expect them to begin working if I died?
We should also point out that it is possible to be able to qualify for coverage while pregnant. That said, we should also point out that most insurance companies will postpone any life insurance application received during one’s third trimester up until they have their six week follow up exam.
#4. Did you hear about so and so?
Many folks will choose to purchase a life insurance policy because a close friend or family member has recently passed away or been diagnosed with some type of “serious” pre-existing medical condition.
In cases like these…
People become reminded of their own mortality and, in some cases, become “scared straight” about getting their affairs in order, including making sure that they have enough life insurance in place. Unfortunately, in some cases, this newly diagnosed condition, such as the Coronavirus, that got you thinking about purchasing a life insurance policy yourself may affect the outcome of your life insurance application.
This is because…
All the best life insurance companies will use their own family medical history as a determinant when deciding who they will and won’t insure. This is why you’ll want to make sure that you discuss any relevant family medical conditions with your life insurance agent before applying for coverage so that he or she can help you find the “best” life insurance company.
#5. New business owners.
Starting a new business is always a scary proposition and one that will often get people thinking about all the potential complications that could arise in the future. For this reason, it shouldn’t be too surprising to learn that many new business owners will often consider purchasing a life insurance policy on themselves, just in case anything should happen to them before they’ve created a valuable asset for their family, like a thriving business.
Fortunately for us…
Here at IBUSA, these “types” of clients usually have a pretty good idea about what they will need to protect their business and their family’s financial future, which always makes our lives here in the office much easier.
#6. Collateral Please.
Sometimes, people don’t really want to purchase life insurance on themselves—they just have to. One example is when one is looking to take on a small business loan or SBA loan.
When this is the case, an individual may be required to obtain a life insurance policy as collateral for a loan. In th, we’re usually looking to find a policy with the lowest monthly payment that will match the amount of the loan being funded.
We also like to…
Try and pair these clients with one of several different no medical exam life insurance policies so that this loan requirement can be fulfilled quickly (less than 48 hours) rather than a client being stuck waiting weeks, putting the loan process on hold.
#7. Divorce.
Another reason someone might call us because they have been forced to do so will be because they are looking to purchase a life insurance policy to fulfill a divorce decree. In cases like these, a judge may require that someone purchase a life insurance policy to cover an alimony or child support settlement.
Now depending…
We tend to provide different advice depending on who is asking for the policy: the insured or the beneficiary. If you are the beneficiary of the policy, we here at IBUSA feel that it’s important that you make sure that you are the owner of the policy as well, regardless of whether or not you are the one paying for the policy. We also recommend that the policy beneficiary be the payor since you will benefit from having this policy in place and suffer if it lapses due to non-payment.
#8. A Funeral Costs How Much?!?
Another reason why someone might decide it’s time to purchase a small final expense whole life insurance policy is that they recently became aware of just how expensive it can be to bury someone.
This “revelation” could be because they recently lost a family member and they had to “chip in” to help pay, or it could be because they were recently asked to contribute to someone’s “Go Fund Me” page where others were asking for help to pay for someone else’s burial. Either way, suddenly, learning how expensive a burial or cremation ceremony can often lead one to consider purchasing a small burial life insurance policy for themselves or another family member, like a parent or sibling.
#9. Loss of a job.
While losing one’s job will inevitably cause someone to begin thinking about what is important to them, it’s also a time when people become aware of just how many “benefits” a job provides that immediately go away upon termination (or retirement). Benefits such as a paycheck, healthcare, and life insurance!
This is why a loss of a job will often cause folks to reconsider whether they want to rely on an employer to provide the only source of life insurance for their family.
#10. Additional coverage.
Sometimes, people realize that their insurance needs have changed over time. This could be because they are now making more money than they were when they first purchased a life insurance policy or because they now have more assets they wish to protect. Regardless of the reason, sometimes folks realize that they are “underinsured.”
In fact…
According to LIMRA, only 59% of Americans have life insurance, and nearly half of that percentage is “underinsured.” Hence, it’s understandable why choosing to get “additional” coverage would make our list.
The good news is that
Regardless of why an individual may have decided to purchase a life insurance policy, we at IBUSA understand what it takes to help them find the “best” policy. Plus, we work with dozens of the top life insurance companies in the industry so that when it comes time to help you find that perfect life insurance policy for you and your family at the right price, we’re not going to have to rely on a…
“One Size Fits All Strategy”
Instead, we’ll be able to instantaneously shop multiple carriers for you, allowing you to choose which insurance company you feel is “best” for you!
