3 Reasons You Could Regret Waiting to Buy Life Insurance – Motley Fool
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Don’t end up with regrets about life insurance.
Key points
Buying life insurance is a crucial financial planning step for many people.Without life insurance, loved ones could face financial disaster after an untimely death.Delaying the purchase of life insurance can sometimes make getting the right coverage at an affordable price difficult or impossible.
Many people will end up needing life insurance at some point over the course of their lives. Despite this, it’s common to put off purchasing a policy. This is especially true for young and healthy people with no one who is heavily dependent on their income or services yet.
The reality, however, is that putting off the purchase of a life insurance policy could be a decision that leads to great regret. Here are three possible reasons why waiting to get covered could backfire.
1. Buying standard coverage may become impossible
In some cases, waiting to buy life insurance could mean it becomes impossible to get a policy at all. That’s because, unlike health insurers, life insurers are able to disqualify people with certain pre-existing conditions.
Life insurers will ask a series of health questions and sometimes even make policy applicants undergo a medical exam. If these preliminary investigations reveal a problem that increases the risk of the insurer having to pay out the death benefit, they could end up denying coverage.
In some cases, while waiting to buy health insurance, it’s possible to develop medical issues that would result in failing underwriting, which is the process insurers use to assess risk. This could mean most or all insurers deny coverage, making obtaining a standard policy impossible.
Now, guaranteed issue policies are available to nearly everyone who applies for one. However, these policies often have long waiting periods, so those who buy them may not actually get any protection for their loved ones until several years after the coverage goes into effect. What’s more, guaranteed issue policies often have low limits such as $25,000 in coverage or less, so it may not be possible to get sufficient protection for family members.
2. Buying coverage may become more expensive
Even if delaying doesn’t make insurance impossible to get, it can make purchasing a policy much more expensive. That’s because insurers charge older people more for protection, and they charge people with even minor medical issues more money than younger healthier people.
Those who buy level premium term life insurance at a young age are guaranteed to pay the same affordable price for coverage during the entire time their policy is in effect. But people who wait to buy life insurance could end up delaying so long that these cheap policies are no longer an option.
3. An untimely death may occur before coverage is in place
Unfortunately, no one can predict when a sudden accident or illness will result in an untimely death. While it would be nice to assume it’s possible to wait to buy life insurance coverage until an older age because it’s unlikely something will happen while still young, there’s no guarantee of this being the case.
Since there’s a chance of passing away before getting coverage if someone decides to delay, there is a possibility loved ones could be left without the financial support they need.
The downsides, in other words, generally outweigh the upsides of waiting. As a result, anyone who has people depending on them now, or who expects to have people depending on them in the future, should seriously consider purchasing a term life insurance policy as soon as they can.
Life Insurance Protection for You and Your Family
While many varieties of insurance coverage are designed to help protect a person’s family and assets, life insurance is a vital type of protection. The right life insurance can help protect the people that depend on you the most if you should pass away. Choosing the right life insurance policy is critical to ensure your loved ones are protected properly. We have sorted through the various options to provide you with our choices for the best life insurance policies available today.
