After a person buys a house, gets married or has children, they often start thinking about how they would support their loved ones if they were to die prematurely, he suggested.
Tiwari said young people may have a greater need for life insurance than older, more established customers. Young clients probably have a mortgage, a young family and maybe elderly relatives to take care of, but not much in terms of liquid wealth.
“People have fewer assets when they’re younger and their expenses are higher,” he said. “So the need for insurance becomes more important.”
In addition to planning to cover these expenses, Tiwari asks clients what they want to offer after they leave. If they have children in sports or extracurricular programs, for example, will they be able to continue those activities when a single breadwinner is gone?
Tiwari said customers considering life insurance should speak to an advisor who can do a thorough needs analysis instead of buying a policy online.
“Insurance tends to be a black box for people; they don’t really understand how it works,” he said. “When you work with a professional who understands the products, you can get a better idea of some features of the policy that you may not be aware of.”
Zainab Williams, founder and senior financial planner at Elleverity Wealth Management in Milton, Ont., said there are several reasons why someone should get life insurance as soon as possible.
Even if a person has no dependents, a small amount of life insurance could cover funeral expenses or unpaid debts, easing any burden on family or friends left behind.
Getting life insurance is also much easier when you’re young and healthy, Williams said, and more affordable. She added that some clients even enroll their children in a life insurance plan as early as one year old.
Williams said young people often look at mortgage insurance instead of life insurance when buying a home. However, she said a term insurance policy is likely more cost-effective and serves the same purpose — and can meet the majority of a person’s other needs.
Williams said one of the challenges when talking to clients about life insurance is that people want to avoid the topic because it makes them think about death. But she reframes the discussion to be about how someone wants to be remembered.
“It’s not just about dying, it’s about leaving a legacy that you may not have had access to,” she said.