Spokane Journal of Business

Don’t procrastinate when acquiring life insurance

Best to buy policies sooner, while premiums likely lower

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With life insurance, there are no “do overs.”

You have to make it count the first time. You can’t buy more after you die.

With that in mind, have you ever wondered what the maximum amount of life insurance is that you can buy to protect your loved ones? Is it unlimited?

No, there are limits established by each life insurance company, but guidelines are similar. For example, depending on your current age, the maximum death benefit a company might issue would be 25 times your annual income.

Someone aged 18 to 40, making $100,000 annually could buy $2.5 million, assuming they passed the medical exam and had a policy issued. Someone older, aged 51 to 60, might be able to purchase 15 times their income, or $1,500,000 in this example.

But first, let’s look at why you may even want to know this in the first place.

For many, to sum it up in one word, it’s called “love.” When we love someone, we do things for them because we want to, not because of some contractual, compulsory reason. We go the extra mile. We don’t just do the minimum to help them get by.

Car insurance is required by the state, and homeowner’s insurance is required with the bank that has your mortgage. Other than for business reasons, such as an insured buy-sell agreement between business partners, life insurance is purchased for a voluntary reason because someone loves someone and wants to protect them.

Consider for a moment the irony that many people consider it acceptable to get group life insurance through their employer that only pays their beneficiaries 1 1/2 times their annual salary, yet if they were to die in a wrongful death, such as being hit in a crosswalk, they would want their family to sue for the maximum possible amount.

Attorneys sometimes call this number the “human life economic value,” which can represent the future dollars that have been lost and that could have been earned, had someone lived a full life.

Think of all the things those future income dollars could have been used for. That goes way beyond just paying for basic funeral expenses and having a little money to adjust. That money could pay off a mortgage, wipe out all debts, send your children to school to give them a choice of a career instead of the need for a job, help fund your spouse’s retirement, among other options.

So, the irony is this: Why is it, if we die of natural causes at the fault of no one, such as a heart attack or cancer, we are OK with giving our loved ones the bare minimum in life insurance—just enough for burial and to get by for a short time; but if we die from a wrongful death, we want them to get the maximum allowed by law—essentially to win the lottery?

Does the cause of death really matter? Is the fault really relevant? Death is death, and loss is loss. Does how we die—whether it was a natural death, or someone else’s fault—really change how much we love someone or feel about them? It shouldn’t, right?

What about cost? 

With medical technology being so strong, and people living longer and longer, the cost of life insurance is really low and very competitive, especially when it comes to term life insurance.

So, unless you have health problems and either can’t qualify, or your premiums are exorbitant, there really isn’t any excuse not to buy adequate life insurance. 

If you’re going to buy life insurance, don’t put it off. Make sure you do so as early as possible while you are still insurable and can pass the medical exam. 

The older you become, the more weight you gain, and the more your health deteriorates, the more expensive it will be to secure insurance.

So, if you truly have people you love dearly in your life, consider insuring your love. Work with a life insurance specialist that has access to a variety of top rated companies and find out what the maximum amount of life insurance is that is available for you—and if you can, buy it.


Todd Radwick, president of Radwick Financial Group LLC, of Winthrop, Wash., is an insurance and financial adviser and 22-year industry veteran. He can be reached at 509.996.3425 or through his website at www.radwickfinancial.com.

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