Buy now
Life
insurance premiums increase dramatically as you get
older. If you buy permanent life insurance while you're
younger and (presumably) healthy, you can take advantage
of lower rates.
Your
premium costs may increase, but these increases are
strictly regulated. Cash value life insurance also offers a type of "forced savings",
and the policy accumulates tax-deferred over time. Buying
while you are younger provides the added advantage of extra time in
which the cash value can grow.
Buying life insurance while you are younger can be especially important
if you are in a high-risk group for any disease or medical
condition that might make you uninsurable. If you choose to buy insurance
for this reason, ask about adding a guaranteed insurability rider to
your policy. This rider guarantees you the right to purchase additional
insurance at specified times, without having to provide
proof of insurability. This way, if you get married, start a family,
or take on other responsibilities, you can purchase the insurance you
need without worrying about whether you will be denied coverage.
Buying term life insurance while you are younger has certain advantages
as well. Like cash value insurance, premiums for term
life insurance increase significantly as you get older. By buying now,
you can lock in low premium rates for the duration of your policy. If
you choose to purchase term insurance, look for a policy with a renewability
provision. This clause allows you to renew the policy without having
to take a medical exam or prove insurability. However, your premiums
will likely increase each time you renew your policy as a result of
your decreased life expectancy
Buy later
In
order to fully reap the benefits of this strategy, you
must have the financial discipline to invest your premium savings
on a regular basis.
Or, instead of depending on your own
ability to faithfully invest each month, arrange for funds to be
automatically transferred from your bank to the investment account
of your choice.
Keep in mind, however, that while this strategy provides the potential for investment returns, these returns are not guaranteed. In addition, it would be unwise to delay purchasing any life insurance if you have children or other dependents who would suffer financially as a result of your premature death.
If buying later suits your needs more at this time, be sure to contact
Demars Financial Group so we can show you some great savings vehicles
that will match your current situation.
