The best time to get life insurance
All too often, life insurance advisers get the “no need” objection from their prospective clients.
This objection is so common that there were already several counter-objections created as rebuttals.
But counter-intuitive as it may, the best time to purchase life insurance is when there is no need at all.
Here is an analogy. Why do a lot a lot of people apply for a passport even if they do not have any plans of travelling at the time of application? It is because they do not know when the need to travel abroad will come, and they have to be prepared at all times. I still remember we had to rush our dad’s passport application because we need to fly to Hong Kong to attend my grandmother’s wake. Fortunately, it was released after several days.
Years ago, a friend of mine once approached me and inquired about purchasing a life insurance policy. I was elated but regretfully told her she is uninsurable. You see, she already has hypertension, kidney problems, and also diagnosed with an enlarged heart. She makes a trip to the hospital at least once a month, and that is not for check-up. She runs the risk of collapsing anytime because she, as her doctor explains, is not getting enough oxygen.
She is a single mother of 4—and only 34.
She certainly has the need for one but her medical condition does not allow her to be insured. It would take tons of underwriting requirements, and in the end her case will most likely be declined.
Her case is an example of how illnesses can creep up silently, and kill us softly. But it is a tad too late for her. She knows there is the reality of dying suddenly and when that happens, she has nothing to leave her kids. She regrets not getting one when she was still healthy, and had no responsibility.
Ten years ago, she had no need for life insurance. Ten years ago, she was healthy and had the means. Ten years ago, that was the best time for her to buy a life insurance policy.
A lot of young people are going through this false sense of immortality. They feel invincible. But times have changed. Lifestyles have deteriorated. More and more young people are contracting the illnesses that should only appear 20 or 30 years later.
Health is just one consideration. Resource is another. Young professionals have the means. Rather than spending everything in things that do not provide value, why not invest in one? There is certainly no harm in starting early. Premiums are lower and accumulation is even higher. Having a high disposable income is a result of little obligations relative to the age and situation. This period may not last long. Some are not even fortunate to be in this condition. It is an advantageous situation to be in. But the luxury may not last forever.
Just like any other product, an insurance policy is best bought when there is no pressure on your part. If there is, you might just end up getting a policy in haste but really does not suit you, making you throw away good money.
Buying life insurance is both an emotional and rational decision. You cannot buy based on pure emotions nor can you buy solely on analysis. It has to be a combination of both to get you the best policy you can have for yourself and ultimately, for your family.
Think about that the next time an insurance adviser approaches you. – Rappler.com
Kendrick Chua is a registered financial planner of RFP Philippines. He writes regularly about personal finance. He is also a Chinese language instructor, TV host, free runner, and violinist. To learn more about RFP, you may email firstname.lastname@example.org.