It’s Never too Late to Buy Life Insurance…or is it?
Many financial experts advise as to the best time to purchase life insurance. They will often talk of significant life events that lead many folks to consider purchasing a policy – marriage, birth of a child, change of employment or increased income, to name a few. There are also business events that can prompt one to purchase a life insurance policy.
However, I don’t ever see any mention of the times when you shouldn’t (or can’t) purchase a policy. Unfortunately, we often receive requests from folks at times in their lives when it actually is too late to purchase a policy. Here are a few examples:
- We received a call from a gentleman who was scheduled to undergo quadruple bypass surgery. This was the “wake-up call” he needed to prompt him to finally stop procrastinating and purchase a life insurance policy so his family would be financially protected should anything happen to him. Unfortunately, due to his pending surgery (and heart condition) he was not eligible for coverage.
- We get a lot of requests from people who have elderly parents or grandparents who are seriously ill and they want to purchase a policy so that, at the least, burial costs would be covered. Unfortunately, we also receive quite a few requests for larger policies ($500K – $1 Mil) for the purpose of “leaving money for the grown children or grandchildren.” Due to the advanced age and often, the illness, most of these people are not insurable. Even if they were, the larger death benefits would not be approved, unless there was significant proof of insurable interest.
- We received a request just this week from someone asking if a life insurance policy could be purchased on a family member who was recently deceased. This was certainly a first for us, so at first we seriously thought someone was joking with us. Unfortunately, this was no joke – this person truly thought that perhaps one could purchase a policy on a deceased person and then receive the death benefit.
While these examples might seem extreme to many, I can assure you that we get at least one of these types of requests weekly. It happens often enough that I thought it was worthy of a blog post. The moral of this story is simple to see – you should buy life insurance when you’re healthy and when there is an insurable interest (a person or entity that would suffer financially if your income was lost to them). Also keep in mind that the younger you are, the less expensive the premiums are. The life events mentioned above are good times to review your need for new or additional coverage.