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When Should I Get Life Insurance?

2021-04-15

If something were to happen to you, how would that impact others around you financially? That’s one of the key questions to consider when deciding if it’s the right time to buy life insurance.

While life insurance is primarily designed to provide financial support to those who would be impacted financially if you were to pass, it’s not the only reason to buy a life insurance policy. Whole life policies, in particular, have added benefits, as they build cash value that can be applied later in life to help pay for important milestones, such as buying a home, helping with your children’s college tuition or even supplementing your retirement.

When it comes to choosing the right policy for your needs, several factors come into play, including your age, financial responsibilities and budget.

At What Age Should I Get Life Insurance?

If you don’t already have coverage, the short answer is as soon as possible. Mortality becomes an increasingly important topic to address as you age. Unfortunately, the older you get, the more at risk you are for having underlying health issues and, therefore, the more expensive insurance premiums can be. That’s one big reason why it’s smart to take out a life insurance policy as early as possible, especially if you’re buying permanent life insurance such as a whole life policy. Here are more reasons:

  • Whole life premiums do not increase with age. The earlier you purchase a whole life policy, the lower your monthly premium will be. Best of all, it will never increase for the life of your policy.
  • Whole life policies build cash value as they mature. This means the longer you have your policy, the more your cash value will grow as you get older. But cash value takes time to build, so the sooner you take out the policy, the more it will be worth when you need it.
  • Premiums get more expensive the older you get. Taking out a policy as early as possible  will help keep that monthly premium affordable.
  • As you age, you may develop health issues that can make getting life insurance difficult. If you take out a whole life insurance policy early, your premium will not change even if your health deteriorates.

While it’s smart to invest in a life insurance policy while you’re young, it’s not always the ideal time to calculate how much life insurance you’ll need in the future, especially if you are still single without children. Provided you remain in good health, you can always take out a smaller whole life policy now, then supplement it with additional policies later on.

When Is Life Insurance Most Needed?

The answer is simple: when your death would have a negative financial impact on someone else. The primary purpose of term life insurance is to replace your lost income should you die while still in your earning years, helping your loved ones continue to afford your home, pay the bills and prepare for your children's future. As the name suggests, whole life insurance stays with you beyond your earning years all the way to the end of your life and protects your survivors from the financial burden of your final expenses. An AAFMAA life insurance specialist can help you determine which type of insurance is right for you (most people get some of both), how much insurance you need, as well as the best settlement option for your family’s specific situation.

Spouses and children may not be the only ones who rely on your income. For instance, if your parents have co-signed on a loan, they will still be responsible for making payments even after you’re gone. A life insurance policy with enough coverage to pay off outstanding debts would protect them from that becoming their liability.

You may want to have additional insurance, such as a term life policy, for a length of time when your family will need your financial support the most. Term life policies only provide coverage for a specific length of time, or “term.” So, for instance, you may want to carry an extra term policy while your children are younger, then reduce the amount of insurance you carry once they are grown, or you may want extra coverage until your mortgage is paid off.

As a servicemember, it’s also important to consider having extra coverage while you are deployed, as your risks increase during that time period.

Talk to AAFMAA About Your Life Insurance Options

When it comes to buying life insurance, there’s no better time than today. Call 866-311-1812 to speak with our expert Membership Coordinators to learn more about AAFMAA’s many military life insurance options, or get a free, no-obligation quote online.

Common Questions

Yes, your AAFMAA policy will cover a death related to COVID-19 if you are an existing AAFMAA Member with a policy issued more than two years ago or prior to a COVID-19 diagnosis, even within the first two years the policy is owned. The only exclusion on AAFMAA policies is death by suicide within the first two years.

However it is important to note that death claims made against an underwritten policy issued within the last two years are contestable, regardless of the cause of death. Contestable death claims are reviewed and subject to denial if we find undisclosed material information that would have changed the outcome of the policy issuance decision.

Yes, if you are applying for a policy that requires medical underwriting, you must disclose a positive COVID-19 diagnosis. Not doing so would be considered material misrepresentation and could result in your policy being voided.

As mentioned above, death claims made against an underwritten policy issued within the last two years are contestable, regardless of the cause of death. Additionally, you don’t have to die for a material misrepresentation to void your contract. The policy can be voided at any point within the first two years if AAFMAA finds that you provided incorrect information about your health history and that the correct information would have prevented us from issuing the policy.

If you were diagnosed with having contracted COVID-19 prior to applying for life insurance and you failed to disclose that diagnosis on your application, your death claim could be denied. This is because, if you had disclosed your COVID-19 diagnosis, we would have followed current industry guidelines and possibly postponed acceptance of your application. In this case, your policy would be voided and your survivors would only receive a refund of the premiums you had paid.

No, the COVID-19 vaccine is classified as a typical wellness check, for which we do not require disclosures and do not deny death claims. We strongly suggest that our Members follow CDC recommendations and receive the COVID-19 vaccination as soon as they are eligible.

Industry guidelines indicate that a COVID-19 diagnosis may postpone acceptance of your application for a period of three weeks to 1 year following recovery, depending on the severity of symptoms and treatment. This timeline is subject to change as new information becomes available and industry guidelines are adjusted accordingly. Those who experience a full recovery may be considered for issue before 12 months, while serious cases (such as those which required a ventilator) may be postponed for longer.

No. Receiving a COVID-19 vaccination will not affect the acceptance of your application.

No, AAFMAA cannot change your premiums or your health classification on a policy you currently hold. Your premiums and health classification will remain the same, even if you have been diagnosed with COVID-19 or you are at a higher risk of exposure due to your job, living situation, or recent travel, or if you get one of the COVID-19 vaccinations approved for emergency use by the USFDA.