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At what point do I need term life insurance?

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  • At what point do I need term life insurance?

    I am 32 years old, recently engaged, and finish residency in June. No debt, though my partner has enough for the both of us with her professional training. No kids.

    At this point I feel like I don't have a specific need for life insurance. However, already during residency I had a back injury (now recovered) that was a big scare and would be a huge road block for future disability insurance applications, though I was lucky enough to have locked in some good coverage before that occurred. As such, I'm particularly concerned about future insurability and developing a pre-existing condition or medical paper trail from any random future doctor's office visit. Is this a reasonable concern and reason to get a term life policy this early? They are relatively cheap so for low $50 a month range for 1.5 million 20 year term that would take us into our period of when I plan to be financially independent.

    We don't have a mortgage to secure, no kids to worry about though both are likely in the future within the next 5 years.

  • #2
    Other than protecting your future insurability, you don't really have a "need" for coverage based upon what you outlined above. Keep in mind that the criteria used for underwriting disability insurance (morbidity) is different from the underwriting associated with life insurance (mortality). So, short of you purchasing a Waiver of Premium Rider on your term life insurance policy (of which I am not a fan), I would not be too concerned.

    Insurance is all about sleeping well. If you will sleep better having the term life insurance in place and are OK with the cost of it, then it won't hurt to lock it in but you certainly don't "need" it at this point.
    Lawrence B. Keller, CFP, CLU, ChFC, RHU, LUTCF


    • #3
      Term insurance is so cheap that you might as well get it now before you really need it.  5 years will be here before you know it.  And I suspect that it might be a lot sooner than 5 years once you're married.  And even 5 years from now, you'll be in your late 30s, approaching 40s and getting high blood pressure or other various diagnoses which will make insurance far more costly or even cost prohibitive.

      Also, will she be depending on your income at all?  Do you realistically expect your fiancee to keep working, or to pursue her career as actively as she would if she weren't getting married?  I don't know your personal situation, but it would be in the very small minority if she wasn't going to be counting on your income to support her at all, even if she is also an MD.  As a doctor's wife myself, and knowing many others, I can tell you that it's a very common theme for spouses to retire when their doctor husband/wife becomes an attending, or even during residency.  Many of these spouses have advanced degrees (even MDs) and many have student loans outstanding.  And if they don't retire, they often are the ones that are making the career sacrifices for the family, working fewer hours, being less flexible, not being open to move for a promotion, etc.

      And very simply even if you were to die before you had kids, that would be a period of huge emotional loss during which would be made easier if she were to have a small windfall.  It might not need to be millions of dollars, but the cost to obtain additional coverage is so small that it might as well be.