If you have loved ones who depend on your income, it’s important to always have the right life insurance policy. The only tricky part is that life keep changing on you.
Maybe you come bought a new house, had a second child or remarried. Whatever the reason, you realize your coverage needs to last longer than you think.
While it might seem natural to wait until your current policy is about to expire before replacing it, experts say it’s just about the worst decision you can make.
Here’s why, when it comes to matters of life, death, and money, there is no time like the present.
Why should I replace my policy?
With a “term” life insurance policy – the much more affordable type – you only pay for the time you need, whether it is 5, 10, 20 or 30 years.
During this time, you will know that your loved ones will not have to worry about losing the home or struggling with medical bills if something should happen to you.
“Your greatest asset is yourself; your greatest asset is your income, ”says Jeremy Hallett, CEO of Life Insurance Comparison Site Quota. “If you weren’t here to support your family, you’ll want to make sure that money is there.
For most people, there is no need to purchase a permanent policy that will last up to 112 years. If you think 20 years is enough to pay off the house and save money for your partner, a 20-year policy will do.
That said, it’s hard to predict what your situation will be like in 20 years. Perhaps you have a child five years later – and with just 15 years left on the policy, it will expire long before your child graduates from high school.
As soon as anyone knows they need more coverage, says Hallett, they must act immediately.
Why you shouldn’t wait until your policy expires
The simple math behind life insurance, says Hallett, is that “every year you get older it gets more expensive.”
Imagine a healthy 30-year-old man could find a 20-year-old policy for around $ 21 a month. If he waits up to 50 years, the expiry date, buying a new policy of the same duration could cost him $ 85 per month – and this assumes that he did not develop any health problems during this period.
“It’s cheaper to fix the problem today than it is to wait for the future to fix it,” says Hallett.
Early cancellation of a term policy does not incur any costs or penalties. Instead, moving quickly before you get older can help. benefit from a low monthly rate it will pay off for years to come.
What to consider before getting a new policy
While it’s important not to hang around, you should always make sure that the new policy you purchase is the best one for you and your family.
First, take a look at your life as it is today and decide what coverage you need, how long it should last, and if you need it. additional runners.
Now is the time to find the right insurer. You don’t have to stick with the same company that provided your original policy; in fact, the Insurance Information Institute recommends compare at least three quotes before choosing an offer.
Shopping around the rates will ensure you get the best possible deal on your life insurance policy, which means more coverage to protect your family and more money to spend on something fun in the here and now.