A question that is often asked to us is, “when should I buy life insurance, and how much should I buy?” It is a difficult question to answer, because there are so many different variables that go into planning for insurance. When we complete the planning process for insurance for our clients we look the whole picture, what is the whole picture? The whole picture is large…but think of different variables like family, age of children, their age, income, net-worth, and affordability to name a few. We see clients taking out insurance policies after the purchase of their first home, when they have children, get married. There are times we see clients not buy their first life insurance policy until they are in their 40’s, 50’s, 60’s and 70’s. Why wait? Why wait for premiums to be more expensive for you, why not take out life insurance before 30?
Life Insurance Before 30…
As we grow older through our lives, not only do we grow as an individual, but the likelihood of an ailment increases. Buying life insurance before 30 will help lock in coverage while you’re healthy. Rates climb as you develop health conditions. You might think you’ll never get common ailments like high blood pressure, but the odds are against you. While just 11% of men and 7% of women ages 20 to 34 have high blood pressure, 37% of men and 35% of women ages 45 to 54 have the condition, according to the Centers for Disease Control and Prevention. Among 55- to 64-year-olds, 54% of men and 53% of women have high blood pressure.
How Much Does It Really Cost?
There is no question many of us spend our hard earned dollars on items that we really may not need. A Starbucks cup of coffee $2.15, something a little more fancy maybe north of $4.00, now we add in the morning breakfast item and we walk out spending $7.00, 5 days a week, that could turn into $140.00 a MONTH.
When respondents in the insurance survey were asked how much a $250,000 term life policy for a healthy 30-year-old would cost each year, the median estimate was $500, over three times the actual cost of $160. Millennials in the study, ages 18 to 36, guessed an even higher amount: 44% pegged the cost at $1,000 or more a year, compared with 29% of older respondents, the insurance study said.
“Many people don’t look for life insurance because they think it’s too expensive,” says Marvin Feldman, president and CEO of Life Happens.
Male 25 years old, Preferred Plus Rating, Non Smoker
$1,000,000 of Coverage
- 10 year term = $250/annual
- 15 year term = $295/annual
- 20 year term = $404/annual
- 30 year term = $645/annual
What if we look at a Female 28 years old, Preferred Plus Rating, Non Smoker
$1,000,000 of Coverage
- 10 year term = $213/annual
- 15 year term = $264/annual
- 20 year term = $332.50/annual
- 30 year term = $552.50/annual
Apply Through A Phone Interview
Applying for life insurance before 30 will also allow for accelerated underwriting on coverage limits up to $1,000,000. Accelerated Underwriting programs through carriers are able to process applications and issue policies in as little as 5 business days. Carriers have a list of general health questions, all of require a yes/no answer. If there are no concerns with the answers to those questions an underwriter from the carrier will reach out for a 20 minute phone conversation. The underwriters ask very general questions about family history, vacation spots and recent health related visits. After the interview the underwriter will make a determination to issue the policy, or if something pops up they may require a Paramed Exam.
There are carriers like John Hancock that have programs to provide additional benefits. As mentioned in previous blogs, the John Hancock Vitality Program will provide an Apple Watch for as little as $25.00. They provide discounts on cruise lines, money back on healthy groceries, half price hotel stays at Hyatt’s. In addition to premium discounts on the main focal point of life insurance. John Hancock has partnered with Vitality to create a better experience for all of their clients. They believe that if a client is taking the proper steps to live a healthy life, that they should be rewarded for doing so. The newest feature of the Vitality program is the HealthyMind Benefit. John Hancock Vitality life insurance program is now rewarding clients for taking steps to give your mind and body the relaxation and rest it needs to improve your overall health. Points will be earned by meditating as little as 10 minutes per day and completing a 30 day sleep challenge.
Plan For The Future Today
By applying for Life Insurance before you are thirty, you are getting ahead of your future planning. As you move through life and take on more responsibilities in the event of something happening to you, your loved ones will be protected. There are a number of different insurance policies available out there, but we believe term insurance can provide the benefit of providing coverage at a low cost, with a high benefit for a guaranteed period of time. Taking a 30 year term policy out when you are 28, you are guaranteeing you coverage until you are 58 years old, the coverage is protecting your loved ones during your prime earning years, and perhaps what some may call your most expensive years.
By starting the planning process today for your future you are also creating flexibility for yourself down the road. Term insurance can be converted into a permanent policy during the term period. The policy can be converted to a permanent plan for the equivalent amount of coverage without having to provide additional evidence of insurability. We will dig deeper into term conversions on another day, but we love the flexibility it creates due to the fact that the insured will not have to go through any type of medical underwriting.
Contact Us For A Quote Today
On the right hand side of this screen there is a form, if you fill out the form we will send you a quote within 12 hours for you to review. Let’s see if life insurance before 30 is a fit for you.
Thank you for your time today
Tyler Berntsen – Managing Director