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What is the best age to get life insurance?
15 Aug, 2022
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What Is the Best Age to Get Life Insurance?

We all want security, and, therefore, we love protection. Life insurance gives you and your relatives a secure future. It enables you to worry about other things in your life like student debt, car loans, house loans, and the rest.

Life insurance offers a safety net for your family or student loan co-signers in case of your untimely demise. However, despite the numerous benefits of life insurance, not everyone understands its importance, the best age to get it, and where you can get coverage.

In this article, we will explain the various types of coverage and the best age to get life insurance in order to help you plan for your future and choose the most suitable insurance policy for you and your family.

What is life insurance?

Life insurance is a financial, legal document signed by an insurance company and the insured (you), clearly stating that if the insured dies, the insurance beneficiaries will receive a payout (death benefit) of an agreed sum.

With this death benefit, your beneficiaries can take care of your burial arrangements, medical bills, mortgage, etc. Thus, there is a lesser financial burden on them after your demise.

To better understand life insurance, we will take you through the two main types of coverage.

1. Term life insurance

Synonymous to temporary life insurance, this insurance policy offers coverage (payout money) over a particular period. The specified time is usually between 5-20 years.

One advantage of this policy is that it is affordable. This makes it popular among people in their 20s and 30s because of how low the premium (money you pay to the insurance company per month over the term of the policy) usually is.

With this type of life insurance, if the insured dies during the specified time, the beneficiary receives the death benefit from the insurance company. If the insured does not die within the specified timeframe, though, there will be no payout.

The insured can renew this policy. However, term life insurance becomes more expensive as you age. There is also no cash value to this life insurance policy, which means that all your premiums are set towards your coverage, and no portion is set aside for investment.

2. Whole life insurance

Whole life insurance policy offers you life coverage. As long as you live, your death benefit, cash values, and premiums are guaranteed and remain unchanging.

The benefit of this insurance is that the insurance company invests a small percentage of your premium, and you then can borrow from or collect this cash value. Within whole life insurance, we have two subcategories: non-participating whole life insurance and participating whole life insurance.

Non-participating whole life insurance: This type of whole life insurance gives you fixed premiums, cash values, and death benefits. Suppose your accumulated premiums do not equal the agreed-upon death benefit before your death. Then, the insurance company bears the loss and pays out your beneficiaries. However, in the case of a profit from your cash value, you have no access to the profits. The insurance company then absorbs all the profits.

Participating whole life insurance: In contrast to non-participating whole life insurance, with participating whole life insurance, you share in the insurance company’s profits. Yearly, under the participating whole life insurance policy, the insurance company will pay you dividends or bonuses from your cash value if your cash value makes more profit than your insurer predicts.

What is the best age to buy life insurance?

Your 20s or 30s is the ideal age to purchase life insurance. During this time, you are less likely to develop a terminal illness and are usually in good health. Because of this, life insurance policy premiums bought around this time are usually quite inexpensive.

As a young person, the last thing on your mind is your passing. However, it would help if you planned for your future, as you do not know the time of your death. Life insurance ensures that you will not leave debt to your student debt co-signers.

As well, many life insurance policies will fit comfortably within your budget, so you need not worry about their affordability.

Why You Should Get Life Insurance at a Young Age

1. It provides security for the future

We often get anxious about the future for many reasons. Some of those reasons may be due to our student loans, living expenses, or simply not knowing what the future holds. Life insurance offers you a glimpse into the future. It removes your beneficiaries’ financial burdens if you suddenly die.

If you have a family, it will offer peace of mind to know that your family members will be financially secure in case of your untimely demise.

2. It provides college funds for your children

As a parent, you want your children to get the best education, but college fees are often quite expensive and not affordable to the middle class or lower middle class. With life insurance policies like whole life (which gives dividends), you can fund your kids’ education.

3. It provides an inheritance

Death benefits can also be seen as a kind of inheritance that you can leave to your spouse, children, or any other beneficiary. This benefit can be a legacy that you leave behind.

4. It pays for burial expenses

Burial expenses in Canada are quite expensive. They range from $10,000-$20,000, which is a lot of money. You do not want to leave your family in debt due to your passing. Life insurance can thus cover these expenses for your family.

5. It provides an extra source of income

With the whole life insurance, you can provide an extra source of income for your family through cash values. You do not have to depend entirely on income from your job. You have something to fall back on.

Where can I get life insurance?

As we have been able to highlight in this article, life insurance is very important for every family. However, it seems most people are not rushing to get one.

If you are looking for affordable life insurance as someone in their 20s, 30s, or older, then W.B. White Insurance has you covered. Our insurance policies are multidimensional, and you will find something for your needs.

To learn more about life insurance, call W.B. White Insurance at 1-877-727-0757 or contact us here.

Amanda began her insurance career in 2000. As a Chartered Insurance Professional (C.I.P.), Amanda is passionate about continued education for insurance professionals. Amanda teaches the Insurance Broker Licensing program through Durham College, and speaks about insurance related topics at B2B events.

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Oshawa, Ontario, L1H 1B6

Lindsay Virtual Office