When is the Right Time to Purchase Life Insurance?

As a small business owner, you already have plenty to worry about when it comes to insuring and protecting your company. Unfortunately, for many, this comes at the expense of handling personal responsibilities and coverages, including life insurance.

You may find yourself wondering, “Do I really need life insurance? Is that a necessary expense at this point in my life?” Or you might simply be putting it off, choosing to avoid thinking about it until you’re a little older, more settled, or better prepared.

Of course, you can’t predict the future—nor can you control it. Anything can happen, so it’s always better to cover your bases early than be unpleasantly surprised down the line.

Before you put off purchasing life insurance, consider the following points to determine whether or not it might be a valuable coverage for you and your family to invest in now.

Your Dependents

If you have dependents who rely on you to provide for them financially, then the answer to the question, “When is the right time to purchase life insurance?” is now!

Consider this:

Are you the primary breadwinner in your family?

Is the income from your small business the primary way that you pay the bills each month? If you have a spouse who doesn’t work or who only works part-time, how would your family cover the bills if something happened to you and you were no longer able to work?

What percentage of the household income do you contribute?

Maybe your spouse has a better job than you do—a common trait among small business owners who are just getting their businesses off the ground. Still, chances are, you contribute quite a bit to the household income, and your spouse and children will need time to adapt and learn how to cover those important expenses in the event of your death.

What services do you contribute to the household?

Are you responsible for picking the kids up from school every day, thanks to a more flexible schedule than your spouse? Do you take care of the yard—something that your spouse would have to hire someone to do if you weren’t around to take care of it? Carefully consider the additional expenses your family would face if you were no longer around to help provide for them, then make sure that you have a life insurance policy that will cover it.

You don’t like to think about the idea of leaving your spouse and kids behind. Choosing the right life insurance plan, however, can ensure that they’re provided for even in the event of your death—and that means financial security.

Your Age

Many people don’t start thinking about life insurance policies until they’re older. They imagine that they have all the time in the world to worry about it—and in many cases, they do.

Securing life insurance as a younger individual, however, is often easier and less expensive than securing the same policy in your late forties or fifties.

• Your life insurance premiums will stay the same for the lifetime of your policy, so if you take out a policy now, you’ll end up paying less for it later.
• Taking out a new life insurance policy after you’ve received a poor medical diagnosis can substantially increase your premiums.
• Taking out a life insurance policy when you pick up a high-risk hobby or profession can substantially alter your premiums.

In general, the younger you are when you take out your life insurance policy, the less expensive it will be. You may only have to pay a few dollars a month in your thirties, but those premiums will increase significantly as you age.

Taking out a life insurance policy is the one type of insurance that isn’t just protection for you or your business. It’s protection for the people that you’ll leave behind.