Most people look forward to living long, fulfilling lives. However, the future is unpredictable. Tragedy can strike at any time. While one hopes this may not happen, it is better to be prepared for the worst possibilities. If a person dies suddenly, they may leave behind dependents. These dependents may be financially incapacitated after their provider passes away, which can negatively affect their lives.
Life insurance plans protect your dependents, so that they do not have to face such a bleak future. One can also choose from different types of insurance to keep their loved ones safe.
In today’s time, many people are not serious about life insurance. Anyone who is currently postponing the purchase of insurance might be making a big mistake. While this may not sound like a fun purchase or an enjoyable thing to spend money on. But with this you can definitely save your family from financial troubles.
If you are also waiting to buy life insurance, then you must know about its 3 big downsides :-
1. The desired coverage may not be available later
When you wait for something, later the same thing is not available or becomes very expensive. The same happens with life insurance. The single biggest reason not to wait to buy life insurance is that it may become impossible over time to purchase the desired coverage.
Life insurance is a protection plan that anyone can buy. Be it young or old but there are some rules for everyone to live by. In today’s time, people are very aware about insurance, but its reach is very less.
Term insurance is the purest form of insurance and is very popular. But not everyone can afford the most desirable type of term insurance. This is because medical underwriting is required. Insurers consider health status and age when deciding whether to issue a policy.
Waiting to buy life insurance increases the risk that age or illness will make it impossible to purchase the best policy to protect loved ones. Nobody wants this to happen, and this negative aspect cannot be ignored.
Also Read – What Is Life Insurance | How To Choose Best Life Insurance?
2. Premium costs may climb a lot higher
There is less risk to the insurer in offering a policy to a young person than to an older person. This is the reason why insurance policy becomes expensive for old age people. The more you delay in buying the policy, the more your premium increases. The premium for the policy coverage you seek later may be very high and the policy may not be affordable. At the same time, a policyholder may need to get a lower death benefit if they cannot afford the amount of coverage they want.
To avoid this loss, you should buy life insurance as early as possible. Maximize your coverage amount while buying insurance. For example, someone who is not yet married but is planning to get married and have children may want to buy coverage before meeting a spouse, So he has protection when needed. A young person gets maximum and longer coverage and that too with very low premiums.
3. A Tragedy May Occur Before Coverage Is Obtained
We all know that human life is very unpredictable, any accident can happen anytime. In such a situation, you can put your family in a financial crisis. Although none of us want this to happen to our family.
However, the last and most obvious downside of waiting to buy life insurance is that a tragedy could happen before a policy can actually be purchased. If one dies, insurance is a must to provide for the surviving family members. The policy can pay for funeral expenses and give surviving loved ones the funds they need to maintain their quality of life.
In many cases, life insurance policies also have a terminal illness rider. It can provide money to cover medical care expenses and end-of-life costs when someone is dying. This essentially allows the policyholder to access a portion of the death benefit early, if needed.
This money, following a terminal illness or death, can protect policyholders and their families from significant financial hardship during difficult times. But, it will not be available if a person waits too long to buy life insurance and becomes ill or dies before acting.
Also Read – The 7 Main Factors that Affect Life Insurance Premium
In light of these three major drawbacks, it should be clear that waiting to buy life insurance is not advisable. Buy it today.
Frequently Asks Questions(FAQ’s)
Q1. Why do most people skip buying life insurance?
People don’t like to think about their own mortality – even if it means leaving their spouse vulnerable to poverty if they die early or unexpectedly. Death is part of life. Death can come at any age. Your loved ones will be better off if you plan for potential problems.
Q2. When should you consider buying life insurance?
You should buy life insurance when you have dependents whose future depends on your future earnings. If you die, you want them to be able to go to college and maintain a semblance of the lifestyle they had when you were alive.
Q3. What is the right amount of life insurance?
Having life insurance is not enough, it should be sufficient to take care of your family’s financial future when the need arises. Historically, numbers show that you should have at least 10X to 25X of your annual income as life insurance cover.
The Bottom Line
If you have dependent people then ideally you should take life insurance for your family, if something happens to you, they will at least have some money to run their lives. So never live without life insurance. This would be a big mistake as we cannot be sure of tomorrow.
The best policy for you is the one that best suits your specific insurance needs. For example, if you are looking for a pure protection plan, you can buy a term plan. But if you are looking for a life insurance policy that provides income and returns, then you can consider buying a ULIP (Unit Linked Insurance Plan) or a retirement plan.