By Jarrett Suddarth
Finishing residency brings a lot of changes to your life. You are starting and getting settled into your first attending job. You might also be moving across the country, getting married, buying a house, or starting a family. To say you have a lot going on might be the understatement of the century! Amid all of these exciting changes, it’s easy to forget about life insurance.
Plus, you’re young… so nothing is going to happen to you, right?
However, your need for life insurance is the most crucial while you are young and have financial dependents. So, let’s look at some of the reasons why most young physicians should get life insurance in place as soon as possible.
Important Note: I want to make it clear that I’m only talking about term life insurance - not whole life, universal life, and any other types of permanent life insurance. We strongly believe that term life insurance is far and away the best option for young physicians because it provides pure insurance coverage at the lowest cost, without difficult-to-understand investment components.
Getting Married
After getting married, you now have someone else in your life that’s dependent on your income. Your spouse may have their own job, but unless they are also a physician, chances are you will be the breadwinner. Your income is not only responsible for providing for yourself, but also your spouse. Furthermore, your income is also responsible for providing for both of your futures as well.
Also, with your new, higher income, it's likely you’re no longer living like a resident. Maybe you upgrade your car, spend more money on fun activities, or eat out more frequently. This new lifestyle should be considered when getting life insurance. If something were to happen to you, life insurance is used to ensure that your spouse could maintain a similar standard of living.
Starting a Family
Another major milestone is starting a family. Having kids is an awesome experience, but it also adds to the number of people dependent on your income. After having kids, you need to make sure that you have enough life insurance to cover your family while your kids are growing up. The cost of daycare, preschool, school activities, sports, or whatever interests they might have all need to be considered. You might even consider having enough life insurance to pay for their future college education, if that’s an important goal for you.
Buying a House
If you buy a house (and have a spouse or kids), a mortgage is another reason to have life insurance. If something unexpected happens to you, the last thing you want is for your family to be unable to stay in your family’s home. Having enough life insurance to pay off the mortgage can provide peace of mind by knowing that your family can stay in the home that they love.
Why You Need Life Insurance Now (When You’re Young)
As you can see, many of these major life events can happen in quick succession resulting in your need for life insurance going from zero to its peak in a short amount of time. Now, the great thing about needing life insurance when you are a new attending physician, is that’s also when it’s the most affordable!
There are several factors that life insurance companies consider when setting your insurance premiums. However, some of the main ones include your age and health – two things that young people tend to have working in their favor. According to Ramsey Solutions, a $1,000,000, 20-year term life insurance policy costs about $47.50 per month for a healthy 32 year old male, and about $38/month for a healthy female. By age 42, this price per month jumps to $87 for healthy males and $69 for healthy females.
Obtaining life insurance while you're young and healthy helps mitigate the risk of being denied coverage or facing inflated premiums due to health issues that may arise later in life. By securing life insurance while you are a new attending physician, you are locking in coverage while you're at your most insurable state.
Lastly, here’s probably the most important thing to keep in mind about getting life insurance while you’re a new attending physician. In addition to all major life milestones happening and your health being at its best, the beginning of your career is also when your financial future is the most unstable. You are in a new job, a new career, and potentially even in a new state. There’s also a good chance that your net worth is the lowest it will ever be. It’s important to keep in mind that your future income is an opportunity, but it’s not guaranteed. When you haven’t accumulated financial resources, you need to depend on life insurance more to protect your loved ones’ financial future.
In the flurry of life changes that come with finishing residency and starting your career as a new attending physician, securing life insurance might not be top of mind. However, it's a crucial step, especially as you navigate many major life milestones. By getting life insurance early, you lock in lower premiums while ensuring financial security for your loved ones during this transitional phase and beyond. Don't overlook this essential aspect of planning for your future.
Panoramic Financial helps new attending physicians make sure that they have proper life insurance coverage in place. Please click “Work With Us” at the top of the page to learn more.
