It’s the one thing all of humanity has in common, the one process that affects us all, the mechanism from which none of us are immune. We all age, although like most things in life, some do it better than others.
Like death, it is something that we can’t avoid, nor should we want to, because the alternative to aging is death! Unless we succumb to an illness or are the victim of an accident, chances are we are going to be around for a while, and that’s good.
So what does this have to do with life insurance? Plenty, actually. Because we will all die either young, old, or somewhere in between, it makes the pay-off on a life insurance policy an absolute certainty, provided, of course, that it is in effect on that unknown day when we check out.
However, there is a common school of thought that says that life insurance won’t be needed when we’re older. While that may be true for some, in my experience, it’s not true for the majority.
Just like we don’t know when we will die, we, as young persons, cannot possibly see all that life has in store for us. Sure, if life goes exactly as planned, maybe there will be little need for life insurance when we die, but all too often, the plans go awry. Divorce, lay-offs, disease, bad economy, bad investments; a myriad of mishaps ready to derail the best laid plans.
There are four basic outcomes. You can reach retirement with insurance and either need it or not, or you can reach retirement without insurance and either need it or not.
Obviously, the worst of those four outcomes is to reach retirement age without life insurance and yet still have a need for it. Even if health doesn’t prevent you from obtaining it, you will certainly feel it financially.
If you reach retirement without it and don’t need it, fine, no harm no foul. Same as if you reach retirement with it and need it, great, you planned ahead. But what about if you reach retirement with it but don’t need it? Is that such a terrible position to be in? It certainly beats needing it and not having it.
The problem is we’re normally not thinking in those terms when we’re in our twenties. Retirement is 40 years distant and besides, we’re in our twenties, we’re immortal!
Those of us in or nearing retirement have a different perspective. In hindsight, we can see that reaching retirement age with life insurance that is not needed (because everything, or at least the major things, went well) would be a silly reason not to buy it when we’re young.
The health and, to a lesser extent, financial habits we develop as youngsters will go a long way in determining how we will age. But it’s almost never too late to improve our habits. Sure, it’s better to start young, but the saying “better late than never” is true.