When is the best time to buy life insurance for individuals?

  Detailed analysis on survival financial needs

 Generally speaking, there are two types of life insurance policies for individuals. Both term life and whole life policies can be used by the insured / policyholder to protect loved ones when the insured dies. The whole life insurance policy has recently played an increasingly important role in individual retirement planning for working classes, due to ever-shrinking corporate retirement benefit and uncertain future of social security retirement benefits.

Therefore, from a pure need based standpoint, most people approaching retirement ages have obvious needs for life insurance, especially whole life insurance. Young folks generally do not seem to have immediate need to buy one, except in single-income families or families with kids.

However, buying life insurance is not as simple as buying an ordinary tangible consumer product, which can be bought at pretty much any time. Chances are that when one feels like having an immediate need to buy life insurance, it is probably already too late. Because life insurance will most likely be unavailable for purchase due to lack of insurability caused by prospective insured’s poor health. If the policy is somehow still available, the cost will probably still be too prohibitive to make any practical sense.

Insurance is a product for protecting against uncertainty in life, and is needed only for those who cannot predict the future but desire to hedge its unmanageable risks with manageable payments. In other words, any one who needs life insurance naturally lacks the capability in predicting the risks of the future. Since timing the purchase of insurance hinges on such future risk prediction capability, it is thus generally impossible to achieve.

Therefore, the good old life insurance agents' sales pitch of  “best time to buy life insurance is as early as possible while one is still qualified, such as now”, still holds, even in this touch economy, providing one can afford the premium payments of the insurance policy. To make policy premium more affordable to general public, most insurers have come up with different product strategies which are to be discussed next time.