If you want to minimize your cost of insurance over your lifetime, it’s super important to think about how long you’re going to need the coverage for.
A common mistake is to get life insurance for ten years (because it’s often the cheapest option in the short run), when in fact you’re going to need coverage for twenty years, and maybe even some coverage for your entire life.
The issue is that rates go up as you grow up. So when your ten year policy expires and you still need insurance coverage, you’re going to pay way more than if you had just gotten a twenty year policy to begin with.
Lots of people find themselves in this situation because the ins and outs of insurance can get confusing fast, and insurance salespeople rarely take the time to explain it all clearly.
And it’s not the end of the world. It’s just not optimal for minimizing your cost of insurance.
The point to remember is that you generally want the length of the insurance policy to line up with the length of time that you’re going to need the coverage, and that when you pay the lowest amount possible in the short term, you usually end up paying more in the long run.