Many people think that they will buy life insurance if and when they believe they need it. This attitude fails to take into account that one must qualify for life insurance; you can’t necessarily get it just because you decide that now is the time you want it.
To be sure, the great majority of applicants do qualify for coverage, albeit maybe not at the best rates. Age and health are the primary drivers of premium, so the younger and healthier the applicant, the lower the premium.
Given that, it seems reasonable that, economically, the absolute best time to buy life insurance is the first point at which it is financially feasible to do so. For most people, that point is upon entry into the workforce.
It is my experience that most young people graduating college don’t believe they have a need for it, so they pass on the opportunity to acquire it at a rate they will never see again. Provided they are still insurable at reasonable rates when they decide they need it, that probably won’t be the worst financial decision they make, but a lost economic opportunity nonetheless.
Generally, our need for life insurance increases for at least the first part of our working career. Our incomes usually increase and along with it so do our liabilities, both of which tend to raise the insurance need.
Older people tend to have more health issues than younger people, and here older is relative. Generally speaking, people in their 40s have more health issues than people in their 20s. That can be problematic when the 40 year-old is in the market for life insurance.
Every single fortysomething in the market for life insurance wishes he/she could obtain the coverage at 22 year-old rates. Yet at 22 it was the farthest thing from his/her mind. And so the fortysomething will pay a minimum of two times, and quite possibly three or four times the amount that it costs a 22 year-old. Of course it could be even more than that, or possibly not attainable at all, should there be some serious health issues.
I understand that there is no convenient time to buy life insurance. At every stage of life, there are always many demands on our income, and they are not going away. Sure, they may diminish somewhat, but the odds are they will not cease to exist.
So all we can do is bite the bullet and take the plunge. If you choose whole life you will, in addition to protecting your loved ones, create an asset on your balance sheet. And if you choose term you will, in addition to protecting your loved ones, feel good about yourself. Which is a nice side benefit.