When it comes to buying life insurance, you can never be too young. Some may have had a policy put in place by their parents, whereas others wait until they get married and have kids. However, there are also plenty of people who don’t even think about life insurance until they’re over 40 years old. While buying life insurance is usually cut and dry, there are things you need to consider when buying insurance in your 40s.
Consider Your Priorities
Buying life insurance in your 40s comes with a different set of considerations. When you’re in your 20s, you may only want enough coverage to assist your loved ones in the event you pass away unexpectedly. You choose to cover funeral expenses, credit card debt and your student loans. However, in your 40s, you may have a completely different set of priorities.
If you’re married with children, you want a policy that provides your family coverage to take care of burial expenses, outstanding debt and possibly even pay of your mortgage. However, if you’re single with little to no debt, you may not need that large of a policy. In either case, you want your life insurance to cover your outstanding financial obligations and funeral expenses. This is even more important if you have a lot of debt, regardless of type. A modified endowment contract is a unique form of life insurance that comes into play when purchasing life insurance, so if in doubt, contact an experienced agent for details.
You also need to consider your overall health. Even though most people are living healthier than ever before, it’s not uncommon to develop certain health issues as you get older. Even if you have no underlying health issues, you need to be honest with your lifestyle choices. If you smoke, drink alcohol or use recreational marijuana, you need to be honest. Doing so may not always necessarily inflate the cost of your policy.
Types of Insurance
There are two types of coverage, term and permanent. Term insurance is geared for specific periods of time, like while your children are small. Some people may opt for term insurance to cover the length of their mortgage as well. Permanent insurance works differently. You can keep this type of policy in place for as long as you live.
Once you’ve paid enough into the policy, you can also borrow against it. It’s not uncommon for people to do so when they need to pay for home repairs, unexpected medical bills or even for a down payment on a new home. People who choose life insurance need to decide on a policy that will serve as income for their family and pay for funeral expenses when they pass. Before you choose a life insurance policy, consider both your financial situation now and how financially secure your family will be when you pass. The most important factor is choosing a policy that will make this difficult period just a little less stressful when that time comes.