When planning your estate, when is a good time to buy life insurance?

By on July 29, 2011

As an insurance based estate planner, I am often asked the questions, “when is the best time to buy life insurance” or when is the best time to buy Long Term Care Insurance?” Coincidentally enough, the answer to the two is the same- The night before you need it!

I’ll be the first to admit that I have never had a client die, the day after they purchased a life insurance policy. I have had a client die six months to the day of buying one, and another 18 months after buying their policy. Both were unexpected accidents. The closet one was an individual who I met on a Friday night at a dinner party, who was tragically murdered the following Monday. Unfortunately for his surviving spouse, there was not enough time to get anything in place for him and she suffered the consequences.

On the Long Term Care side, I had a client purchase a policy with a three year benefit period. With in two years of purchasing her policy, she was diagnosed with an in operable brain tumor.

Estate planning is about protecting assets, be it income or retirement money.
The number one fear of my senior clients is that they are afraid of out living their income. The number one fear of younger clients is leaving their family broke if they should die early. In both cases, one of the biggest threats isn’t the most obvious, and that is procrastination.

The reason that procrastination is a threat to anyone applying for Life Insurance or Long Term Care insurance is they must qualify based on their age, gender, and past medical history, and life style. Because of this, the younger and healthier you are when you apply, the less expensive it is to purchase. This creates a paradox for the consumer: You have to buy something before you actually need it. So with that in mind, the real answer to the question to “ when is the best time to buy Life Insurance or Long Term Care Insurance is when you are younger and the healthiest. It will be more affordable and once the policy is issued, you have the protection you want from day one.

Scott Whiting
Southwest Estate Planning Services LLC.
6224 Mossman Pl NE
Albuquerque, NM 87110
(505) 507-4749

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