Updated April 8, 2019
If there is someone who depends on your income for their well-being, you need life insurance. But you probably already knew that. What you might not know is that the best time to apply is now — and not just because you could get hit by a bus tomorrow (though that certainly provides incentive). Here are five reasons why now is the best time to apply for life insurance.
1. Prices are lower than they have been in 20 years
People are living longer, insurers are lowering overhead costs and state regulators having decreased the amount of cash insurers have to have on hand, all of which has contributed to a 20-year low in term life insurance rates. Just this year, life insurance companies including Banner Life, Lincoln Financial, Pacific Life, Protective Life Corporation, Mutual of Omaha and AIG have lowered their rates. (We can help you easily compare and buy life insurance across these carriers.)
2. You’re younger than you’ll ever be
Your life insurance rates are based on several factors, and one of those factors is your age. Prices go up as you get older — 8% on average each year, and up to 20% each year in your 60s — so based on that alone, the prices you can get by applying today are lower than they’ll be in the future.
3. You’re probably healthier than you’ll ever be
Another big factor in life insurance rates is your health. The healthier you are, the lower your rates. While it’s true that you could lose weight or lower your blood pressure and be healthier in a few years than you are today, you could also be diagnosed with a health condition that could mean your rates are higher if you wait and apply down the road. Learn more about how life insurance rates are set.
4. If your rates go down, you can replace your policy
Let’s say you do lose weight or lower your blood pressure and your health rating gets better. Or maybe life insurance rates keep falling. You can reapply for life insurance and if your rates are lower, there’s nothing stopping you from getting a new plan and canceling your current one. (Just make sure your new policy is in force before you cancel your old one so you don’t go without coverage.)
5. Stacking policies is a thing now
There's no need to put off buying life insurance because you think your needs will increase or change later. Instead, use a life insurance calculator to find out how much life insurance you need now. If your needs change in the future, you can always buy additional term policies to up your overall coverage. It's called the ladder strategy, and it's a great way to up your coverage and keep your premiums low.
Image: Studio Firma