When I first heard about life insurance in my twenties, I dismissed it with a shrug. It seemed like something for older people, for those with families and mortgages and responsibilities that felt light years away from my carefree existence. Looking back now, I realise how wrong I was. Life insurance in Sri Lanka isn't just about preparing for the worst—it's about securing the best possible future for yourself and the people you love. If only someone had sat me down and explained what I'm about to share with you, I would have made very different choices much earlier.

The Earlier You Start, The Less You Pay

Here's something that still amazes me: the age at which you buy life insurance dramatically affects what you will pay for it. When you're young and healthy, insurance companies see you as a low-risk investment. Your premiums reflect that reality. Wait until your forties or fifties, and those same policies become significantly more expensive. The difference isn't trivial either—we're talking about potentially thousands of rupees over the lifetime of your policy.

I met a colleague once who started his policy at twenty-five. Another friend waited until he was forty. For nearly identical coverage, my friend was paying almost double the monthly premium. That's money that could have gone toward other goals, other dreams. The math is straightforward, but somehow it's a lesson many of us learn far too late.

Life Insurance Is More Than Just a Death Benefit

When most people think about life insurance, they imagine a payout that comes after you're gone. That's certainly part of it, but modern policies have evolved into something far more versatile. Many life insurance policies now function as money investment plans in Sri Lanka, combining protection with wealth accumulation.

These hybrid policies allow you to build cash value over time. Think of it as a forced savings mechanism that also happens to protect your family. You can often borrow against this cash value for emergencies, education expenses, or business opportunities. Some policies even offer dividends or investment returns. It's not just about what happens after you die—it's about creating financial security while you're still very much alive.

Your Family's Needs Are Probably Greater Than You Think

One of the most common mistakes people make is underestimating how much coverage they actually need. They think about funeral expenses and maybe a year or two of income replacement. But financial security requires thinking much further ahead.

Consider this: if something happened to you tomorrow, would your family be able to maintain their lifestyle? Could your children still afford university? Would your spouse be able to retire comfortably? The average person needs coverage that's roughly ten to fifteen times their annual income to adequately protect their dependents. That number sounds staggering until you break down what it actually needs to cover—outstanding debts, daily living expenses, education costs, and long-term financial goals.

I have spoken with widows and widowers who received payouts that seemed substantial at first but evaporated within a few years. The emotional trauma of loss is difficult enough without adding financial stress to the equation. Adequate coverage isn't pessimism; its love expressed through practical planning.

Not All Policies Are Created Equal

When I first started researching life insurance companies in Sri Lanka, I assumed all policies were basically the same with minor price differences. I couldn't have been more mistaken. The variations between companies and policy types are significant, and choosing the wrong one can cost you dearly.

Term life insurance offers pure protection for a specific period—usually ten, twenty, or thirty years. It's typically the most affordable option, but once the term ends, so does your coverage. Whole life insurance, on the other hand, covers you for your entire life and builds cash value, but comes with higher premiums. Universal life policies offer flexibility in premium payments and death benefits, while variable life policies tie your cash value to investment performance.

Each type serves different needs and life stages. A young parent with a tight budget might prioritise affordable term insurance. Someone focused on estate planning might need a whole life policy. The key is understanding what you actually need rather than accepting whatever the first agent offers you.

Your Health History Matters More Than You Realise

Here's something I wish someone had emphasised to me earlier: every medical condition you develop before buying life insurance can affect your eligibility and rates. That diagnosis you received last year? It's now part of your permanent underwriting record.

Insurance companies conduct thorough medical examinations and review your health history in detail. Pre-existing conditions don't necessarily disqualify you, but they often result in higher premiums or policy exclusions. I know someone who developed diabetes in his thirties and saw his insurance options shrink considerably. Had he secured coverage just two years earlier, his policy would have been locked in at standard rates.

The lesson here isn't to panic about your health, but rather to understand that time is a factor. Your body will inevitably accumulate wear and tear as you age. Securing coverage while you're healthy isn't paranoid—it's strategic.

The Connection to Retirement Planning

One aspect of life insurance that often gets overlooked is how it fits into broader financial planning. Pension and retirement plans are obviously crucial for your golden years, but life insurance plays a complementary role that many people miss.

Some permanent life insurance policies can actually supplement your retirement income. The cash value component grows tax-deferred, and you can access it through withdrawals or loans during retirement. While this shouldn't replace dedicated retirement accounts, it adds another layer of financial security. Additionally, if you pass away during retirement, the death benefit ensures your surviving spouse maintains their standard of living without depleting retirement savings.

I have watched friends retire with seemingly adequate pension plans, only to struggle when unexpected expenses arise or when one spouse passes away. Life insurance provides a cushion that makes those difficult transitions more manageable.

Honesty During Application Is Non-Negotiable

The temptation to omit or minimise health issues when applying for insurance is understandable. You want the best rates possible, and that nagging back pain or occasional anxiety feels irrelevant. But dishonesty during the application process is perhaps the costliest mistake you can make.

Insurance companies have the right to investigate claims, and they will review your medical records if they suspect misrepresentation. If they discover you lied on your application—even about something that seems unrelated to your cause of death—they can deny the claim entirely. Your family would receive nothing despite years of premium payments.

I have heard heartbreaking stories of beneficiaries who learned, in the midst of their grief, that the policy they'd counted on was void due to a misstatement on the application. The few rupees saved on monthly premiums through dishonesty pale in comparison to losing hundreds of thousands or millions in benefits.

Review and Update Your Policy Regularly

Life insurance isn't a set-it-and-forget-it product. Your needs change as your life evolves. Marriage, children, career advancement, starting a business, buying property—each milestone should trigger a review of your coverage.

Many people buy a policy in their twenties or thirties and never look at it again until decades later. Meanwhile, their income has tripled, they have had three children, and they have taken on a substantial mortgage. Their original coverage, which seemed adequate twenty years ago, now falls woefully short of what their family would actually need.

Schedule an annual review with your insurance advisor. Make adjustments as necessary. Add beneficiaries when children are born. Increase coverage when you take on new financial responsibilities. Your policy should be a living document that grows and adapts alongside your life.

The Peace of Mind Factor Is Real

Finally, there's an intangible benefit to life insurance that's difficult to quantify but impossible to ignore: peace of mind. Knowing that your family is protected allows you to take necessary risks in your career and business ventures. It lets you sleep soundly at night despite life's uncertainties.

I have experienced this transformation personally. Before I had adequate coverage, I carried a low-grade anxiety about "what if" scenarios. After securing proper insurance, that weight lifted. I could focus on building my career and enjoying my family rather than worrying about worst-case scenarios.

This psychological benefit extends to your loved ones as well. They know that no matter what happens, they won't face financial ruin on top of emotional devastation. That security is worth far more than the premium payments.

Moving Forward

If you're reading this and realising you have put off dealing with life insurance for too long, don't beat yourself up. Many of us make that mistake. What matters now is taking action. Research your options, speak with reputable advisors, and make informed decisions based on your actual needs rather than what's most convenient or cheapest.

Life insurance isn't a morbid topic or an unnecessary expense. It's a fundamental component of responsible financial planning and perhaps the most direct way to demonstrate love and commitment to the people who depend on you. The best time to secure coverage was yesterday. The second-best time is today.