Any time is a good time to buy life insurance. However, the arrival of 2019 has led many experts and analysts to agree: it is the perfect time to take out a life insurance policy.
The combination of our current political and economic climate and the prices of insurance right now make this an ideal moment to get your hands on a stable, easy-to-manage, and profitable policy. Keep reading to find out why 2019 is the best time to get your hands on life insurance and invest in this particular product.
Buying Insurance in 2019: Table of Contents
2019: A Shaky Picture
The year 2019 arrived full of hopes and dreams, but also brought uncertainty in many regards. Politics, the economy, and the environment have given us reason to carefully consider where we invest our money. Taking into account this shaky picture, life insurance presents a reliable alternative that is attractive in both price and long-term peace of mind.
You probably already know that the current political climate is unstable for several reasons. In the United States, Donald Trump and the Republican Party have lost the majority in the House of Representatives and frequently clash with the Democratic Party, which makes governing the country difficult. In this type of situation, investors become very prudent and the economy tends to cool. Companies watch their movements much more carefully and also invest less.
The global panorama also contributes to an economic cooldown. The United States has encountered commercial conflicts with China and the European Union, in addition to a growing rivalry with Russia. Other situations also complicate the picture: the unending Syrian war, tension between North and South Korea, the upheaval in Venezuela and Nicaragua, Brexit in the United Kingdom, the immigration crisis... There are many hot points on the international map which end up impacting the economies of most countries, especially the United States.
In addition, there are environmental factors, such as climate change and an increase in hurricanes and forest fires that are weakening society’s confidence in the strength of the economy and its potential for the future.
As you can see, there are many factors that make 2019 a difficult time to invest. The stock market has become volatile, so other investment products are not at their peak performance. It is often said that money is inherently conservative, and the current global picture makes this characteristic particularly salient.
If you are considering what to do with your money in 2019, the best idea may be life insurance, a very stable product that offers guarantees and provides peace of mind to policyholders.
Life Insurance: A Stable Option for Your Money
Compared to other financial products that are subject to market volatility, life insurance offers much more stability and good results for your money. This is due to some of its best features, such as:
- Guaranteed payout. Compared to financial products that do not assure a return on investment, life insurance always does. If the insured dies and the insurance is in effect, this results in a payment that will go to the designated beneficiaries. This means that, at the very least, the money invested in insurance transforms into a benefit.
- Guaranty funds. A huge advantage of life insurance when compared with other products is that states have guaranty funds available. These are institutions formed by different insurers and public entities that are in charge of guaranteeing that policies will continue to have financial backing and beneficiaries can collect their payouts if an insurer goes into bankruptcy. In many cases they may not be collected in full, but at least not all the money invested in the policy is lost.
- Prudent savings instruments. Permanent insurance uses money for investment that is paid in the form of premiums. Using these investments, they generate benefits that are added to the insurance in the form of cash value, a sum that the policyholder can withdraw or use to take out a loan. In general, these investments are very conservative and safe. They offer low, but stable, profitability. This is the case for the most basic forms of permanent insurance, such as ordinary or traditional life insurance or universal insurance. On the other hand, options such as variable life insurance or universal-variable insurance imply higher risk, so these investment may not always yield profits.
- In-depth risk investigation. One of the features that makes life insurance a very solid financial instrument is that insurers perform very serious risk investigation on insurance applicants. These studies are performed during the so-called qualification process, a time when the company requests information from the aspiring insurance holder. Their questions will be related to the applicant’s finances, health, lifestyle, and more. With all this data, the insurer decides what level of risk would be assumed by accepting this person as a policy holder. If the risk is too high, the policy is simply denied.
- Long-term functioning. Insurance, including temporary life insurance, is taken out for long-term or very long-term periods. Far from the immediacy of a large portion of stock market investment, temporary policies are signed for a year at minimum, although it is more common for them to last 15, 20, or 30 years, while permanent insurance is purchased for a lifetime. This means that these products are meant to have a very long-term duration, so they will be likely unaffected by the passing storms impacting the larger economy.
As you can see, there are many advantages to taking out life insurance. In general, your money will be better protected and will suffer less from unpredictable economic conditions.
Choose the Life Insurance that Best Suits You
If you have already decided to take out life insurance in 2019, you must now choose which one best suits you. The first thing you must do is evaluate your coverage needs: What amount would be enough to sustain your loved ones’ standard of living if you die? How much money do you want your beneficiaries to receive? You can determine this by using a calculator to find out how much life insurance coverage you need.
Using this amount as a point of reference, consider whether you need term or permanent life insurance. The former is cheaper. You pay lower premiums because they have a specific duration, so the risk assumed by the insurer is lower and they can offer you a better price. In exchange, payouts also tend to be lower, but you can take out several temporary insurance policies and use them to form a laddering strategy, which offers good coverage at a better price. In addition, they are easy policies to obtain, because companies have fewer requirements.
As for permanent insurance, these policies are more difficult to obtain. Qualification processes are very demanding and insurers meticulously review each client’s application. In exchange, once purchased, they can be quite attractive products. They have bigger guaranteed payouts without a time limit and offer the possibility of accumulating cash value. On the other hand, the premiums are higher.
However, you should not let the price of insurance scare you—in 2019, insurance companies are offering some of the best prices in history. Life insurance is very accessible for several reasons. One of these is technological advancement: algorithms, big data, and other technological innovations are joining forces so the insurance industry can work more effectively. By managing more and better information, insurers can assess risk with more precision, and consequently minimize it. If they assume less risks, they can offer better prices. Combined with these technological advancements, changes in the legal terms of life insurance are allowing insurers greater room for discretion to use the money they receive as premiums.
In light of this, the life insurance market is favorable. Life insurance offers security and guarantees to policyholders, and it is well-protected against market uncertainty, the economy, and politics. As if this was not enough, prices are noticeably better now than they have been historically and should remain low. So do not hesitate: 2019 is the perfect time to take out life insurance and ensure a safe future for your money.