Do I need life insurance? But I’m young and healthy!
No need for insurance? There are plenty of reasons you still need coverage.
Lynda Jones never thought she needed life insurance. At 27, she was busy establishing her career as a dental technician and starting her life with then boyfriend, Gareth. But when the two decided to buy a house together in Hamilton, Lynda realised it was time to get serious about protecting her investment – and her partner. “We got some term life insurance because it covered everything,” she said. “On the off-chance that something happens to one of us, money will be one less thing for the other to worry about when the other is grieving.”
If you’re young and healthy, the last thing you’re likely to think about is your own mortality. But there are plenty of good reasons to consider protecting your loved ones in the case of calamity, says her Adviser. “Life insurance is the most unselfish purchase you can make – because it’s not for you. That’s the challenge that a lot of people have to get through.” He says. “It’s not a car, or a house; it’s not a piece of jewellery. But people have to realise there is good value in it.”
Here are some of the reasons you might want to consider life insurance now:
You have debt (with a co-owner)
Did Mum and Dad sign off on your student loans? Put bluntly, they’re probably responsible for paying off your debt if you die. That could be a huge burden for a mourning family. “My daughter is getting her Masters in the UK and has taken out a six-figure loan,” says Jonathan. “I have a life insurance policy on her so that if she passes away, I’m off the hook.”
You’re buying a home
Let’s say you and your partner decide to buy a place together. Now imagine one of you suddenly wasn’t there to help pay the mortgage. Terrifying right? Buying a term life insurance policy with enough coverage to pay off the house could help your partner stay in the home. “There are some big advantages to choosing term life insurance over some mortgage insurance,” says Tom White. For example, with mortgage life insurance, the value of your coverage sometimes decreases as you pay down your mortgage. With term life insurance, your coverage stays the same for the whole term. “Term insurance is portable, so you can keep your policy even if you move homes, or switch banks, and a term policy lets you choose your beneficiary, whereas with the mortgage cover the bank is the beneficiary,” he says.
You make a lot less (or a lot more) than your partner
Another reason to buy life insurance is if there’s a big disparity in income between you and your partner. “Say one partner makes $140,000 a year and the other makes $35,000. Insuring the difference in income means that if the higher income person dies, the lower earning person can maintain their standard of living while they rebuild their life,” says White.
You’re young and healthy
Buying life insurance sometimes requires that you take a medical exam to determine your premiums and level of coverage. You’ll want to lock in a ‘standard rate’ now in case illness happens in the future. “If you have a term insurance policy, there are no further medical requirements for the duration of the term,” says White. Chances are you’re going to need to buy life insurance at some point, particularly if kids are in your future, so it might be a good idea to apply now to take advantage of your good health.
Now 32, Lynda is glad she and her partner Gareth made the decision to buy now. “I’m happy we bought it when we were nice and healthy,” she says. “You just never know what will happen in the future. It’s best to cover your bases.”