Posted inAutomotive News

When Should You Get Life Insurance?

When Should You Get Life Insurance?

If you’re lucky enough to receive a life insurance benefit from your employer, you might consider the matter settled. But that policy probably isn’t enough to adequately cover your needs as defined by most insurance industry experts.

“Any life insurance is better than no life insurance policy,” says Seattle-based certified financial planner and president of CEG Life Insurance Services Daniel Adams. “But having said that, if you can qualify elsewhere and you don’t have other health problems or concerns, it’s rarely going to be enough.”

Employer-provided policies usually provide you coverage equaling one year of your salary, according to the company’s financial services stolen. But this may not be enough to help your financial dependents maintain their lifestyle after you’re gone.

While some experts suggest 10 times your salary as a rule of thumb for how much life insurance you need, Adams suggests calculating your own ideal coverage. “How much, if you were to pass away, does your family need on an annual basis, and for how long?” he says. “That’s just a simple math equation.”

Here are several situations where you should consider looking beyond your office for a life insurance plan.

You’re early in your career

Younger people tend to think they don’t need life insurance, but buying a policy early in life is a financially smart move to make.

That’s because (in general) the younger you are, the cheaper your life insurance premiums. “If you’re at a young age and [have] a healthy lifestyle, it’s much cheaper than even if you wait a few years,” Adams says. “Those prices are going to go up dramatically.”

According to data from insurance comparison site Policygenius, the typical 25-year-old male will pay $39.48 a month for a $500,000, 30-year term policy, while the typical 35-year-old will pay $46.42 for the same policy — a 16 % increase. By age 45, that rate increases to $105.07 per month, or 77% more.

And, if you’re early in your career, there’s also a good chance that you’ll be moving jobs as your career progresses. “If you leave your job, whether that’s of your own free will or you get laid off, you lose that coverage,” Adams says.

When searching for your own coverage, a great starting point is with CNBC Select’s top life insurance companies. Our overall top pick is Northwestern Mutual, which offers a variety of policy types and is rated highly for customer satisfaction.

Northwestern Mutual Life Insurance

  • cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    As the largest life insurer by market share in the US, Northwestern Mutual is an established choice with a proven record. And, it offers a number of types of policies across the country.

You’d like to have a family someday

Guardian Life Insurance

  • cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Guardian offers a variety of policies, including term, whole and universal. Guardian offers term policies that can be converted into whole or universal life policies.

Pros

  • A++ AM Best financial strength rating

Cons

  • Ranks slightly below other top picks for customer satisfaction
  • Policies must be purchased through a financial professional

Why whole life insurance is good for the whole family

While term life insurance can expire with no payout to your family if you outlive the term, whole life insurance policies provide your dependents with payouts into the future. These policies also earn cash value that can be borrowed against or used to build an inheritance for children.

You don’t have any major health problems

Bottom line

Editorial Notes: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s own, and have not been reviewed, approved or otherwise endorsed by any third party.