Here's Why Dave Ramsey Thinks It 'Really Does Pay' to Get Life Insurance Now Instead of Later

Debating about when to get life insurance? Read this Dave Ramsey advice.

Deciding when to buy life insurance can be complicated.

Some people would prefer not to have premiums coming out of their bank account when they're young and don't have dependents yet, so they end up putting off buying a policy. But, while this may seem to make sense on the surface, finance expert Dave Ramsey believes putting off getting covered really isn't the right approach. In fact, Ramsey says it "really does pay to get it now instead of later," referring to the purchase of term life insurance.

Here's why Ramsey believes buying coverage ASAP is the best approach.

This is why Ramsey says to get covered now

According to Ramsey, buying term life insurance coverage now rather than putting it off can end up saving policyholders a lot of money over time.

"​Term life insurance rates are mainly based on two factors -- your health and your age," Ramsey explained. "Age plays such a big role in setting your rate that estimating how much you'll pay for coverage is pretty easy based on that alone."

Since it's much cheaper to purchase coverage at a young age, Ramsey believes there's no reason to put off purchasing coverage. That's especially true since health conditions can arise unexpectedly and cause premiums to skyrocket, so it's best to put a policy in place before some kind of medical problem unexpectedly comes up.

Ramsey also believes it's smart to get covered right away because putting it off can lead to unnecessary stress and potential financial disaster should something happen before a policy is actually in place.

"There's no reason to put off getting coverage and having the peace of mind that goes with knowing your family's taken care of," the Ramsey Solutions blog reads.

Is Ramsey right?

Ramsey is 100% right that the sooner a person buys term life insurance coverage, the better. Delaying the purchase of a policy creates an unnecessary risk and there's a very real chance that a person could unexpectedly die without coverage if they wait -- or could be priced out of buying coverage in the future due to health problems that develop or due to their advancing age.

When buying coverage at a younger age, though, it is important to make sure the term policy lasts long enough. A term life insurance policy pays a death benefit only if the policyholder dies during the coverage term. And the purpose of this payout is to provide for loved ones who are still reliant on the policyholder for income and services.

If a young person buys a policy and they aren't yet married or plan to be soon, or if a young person buys a policy shortly before having kids, they'll want to make sure they opt for a coverage term that will see their spouse through for as long as the money would be needed. This may mean opting for a 30-year term instead of a 10-year or 20-year policy.

Even a longer-term policy can be cost-effective if purchased when young, so follow Ramsey's suggestion and get coverage in place right now. This is good advice, as no one is getting any younger so term life policies will always get costlier by the day.