It’s a sad fact, but many people don’t think they need life insurance until it’s too late. Many people wait until after a loved one’s death has occurred to realize that person might have benefited from having a life insurance policy. That’s why, as an insurance agent, you should always encourage your clients to have discussions with their families as soon as they can, to determine their life insurance needs. Here are some times that your clients should consider starting their investment in life insurance.
1. Younger Clients Tend to Save on Rates
It’s almost always easier for someone to buy life insurance the younger they are. As morbidly blunt as it sounds, younger people have a lower risk of dying than those who are older. They also are often healthier than those who are older.
Life insurance companies will likely account for someone’s age when offering quotes and setting rates. Therefore, they are more likely to offer lower rates to younger individuals, because those individuals have better chances of getting more affordable rates on their coverage. A client will therefore likely be able to better afford their rates long-term.
2. Buying Upon Marriage
If a client has recently married, then they will likely begin to rearrange their finances. Therefore, you should advise them of the ways to structure their life insurance to the benefit of the spouse. In most cases, this will mean naming the spouse as the policy’s beneficiary. The spouse will be the party who receives the money from the policy’s death benefit if the insured dies.
Furthermore, this might also be the time to talk to your client about purchasing life insurance for the spouse. The client and their spouse could therefore insure each other’s lives, so that the other could benefit in case of one spouse’s death.
3. Purchasing on the Birth of a Child
Another time that many people buy life insurance is upon the birth of a child. Life insurance can work as a benefit for a parent to leave to a child in case they die before the child comes of age. The parent might want to leave the money to a specific purpose, like a child’s education. Or, they might simply want the child’s guardian to have a financial support system for the child’s upbringing.
In cases like this one, advise your client to consider setting up a trust account for the life insurance money. A child cannot receive life insurance money if they are still a minor when you die. The trust account will act as the beneficiary, and many can have specific rules attached that will govern now the money can be used. The trust’s administrator will follow these rules when dispensing money to the child. Therefore, clients can target coverage to a child who will need their benefits.