What Is The Best Age To Buy Life Insurance?

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Quick Answer

You may have asked yourself whether you need to buy life insurance yet. Maybe you’re still young, in good health, and don’t have a family or debt. So, what’s the right age to buy coverage?

While there is no perfect age for purchasing life insurance, there are milestones in life that warrant coverage. If you want to pay less in the end and ensure that your loved ones are protected, you need to buy young, buy while you’re healthy, and buy from a company that will grow with you through the years.

Let’s take a look at exactly how to determine the age at which you should buy life insurance.

Throughout our adult lives, we reach many different milestones. Typically, we graduate college and start our careers in our 20s, buy our first home and start having children in our 30s, and pay off our student loans in our 40s. Of course, everyone’s timeline differs, which is why many people wonder when is really the right age to buy their first life insurance policy.

There are different schools of thought on the topic, but one suggestion holds strong across the board: the best time to consider buying life insurance is years before you think you’ll need it.

Buy Young

Unfortunately, there is no guideline for the exact age that you should be buying life insurance coverage. More important than your birthday is your financial situation, and those that rely on you for support.

However, your age does play one important factor: it influences your premiums drastically. When you’re in your 20s and even your 30s, you may be more worried about paying for a wedding, saving for the down payment on a home, or building up your retirement account. The idea of your own mortality may not even be a consideration yet. Or, if it is, you may not have the funds to dedicate to monthly premiums.

It’s important, however, to make life insurance a priority as early as you can, especially if you have certain financial obligations. While you may save money in the short term by waiting to buy insurance, you’ll likely pay more overall in the form of higher premiums down the line.

Erik: Our Sample Policyholder

Let’s look at an example.

Erik is a 30 year-old bachelor. He has a few outstanding student loans for which his parents co-signed. Even though he’s single and doesn’t have kids, he’s still considered buying life insurance to cover final expenses and those private loans, were he to pass away. He gets a quote from LeapLife.com and finds that he could get $250,000 worth of coverage for 30 years, at a cost of only $22 a month.

Sure, that’s less than he spends on coffee in a single week, but he still thinks that life insurance isn’t necessary quite yet. So, he decides to wait until he’s a bit older, perhaps until he has a family of his own.

Let’s say that Erik revisits his life insurance search when he’s 40, when he has a wife and children. He still wants to purchase $250,000 in coverage for 30 years, the maximum term offered. The problem is that now, life insurance is $38 a month. He’ll still be insured for the same amount and term, but will pay almost $6,000 more over the course of the policy to do so… simply because he waited to buy.

Now, let’s say that Erik really puts life insurance on the back burner. Between his career, buying a home, and raising a family, he hasn’t had the chance to buy a policy yet. Now, he’s 50 and wants to ensure that his loved ones are protected if he passes away.

He starts looking for the same policy: a 30-year term with $250,000 in coverage. He’s shocked to learn, though, that coverage has now jumped up to $94 a month. While this is still an excellent price compared with other providers, it’s a lot more than he would have paid just a few short years ago.

Erik is still in excellent health and wants the exact same policy as before, but it will now cost him over $23,000 more for the same policy. All because he waited to purchase it at a later age.

Sure, if he buys a policy at age 50 versus age 30, he will save those 20 years in premiums. But now, he will pay significantly more for his policy from the very beginning – even those years between 50 and 60, when he would have been insured at the lower rate anyway.

Buy While Healthy

Another problem that Erik, and anyone else considering the buy-insurance-now-or-wait question, will face is the impact of their health on premiums. None of us can predict what our health will do as we age. Injuries, illnesses, and disease can strike at any time, and the longer we live, the more likely we are to encounter these types of things.

Unfortunately, certain illnesses and diseases have the potential to raise life insurance premiums. And if you wind up getting sick with something like cancer, you may even have trouble getting approved for coverage at all (especially for a period of time).

The younger you are when you buy a life insurance policy, the better your chances of buying while you’re still healthy. As time passes, your premiums will be impacted by your health and medical issues, as well as your age.

Buy Based on Your Needs

You should buy life insurance based on your financial situation and the loved ones you would leave behind, rather than the date on your birth certificate. This “sweet spot” is different for everyone, of course.

If you are single and in your 20s, you might not need coverage yet. Perhaps you’re single, don’t yet own a home, and haven’t yet had children. You might not even have outstanding student loan debt that would transfer to your co-signers.

Perhaps, though, you would want to buy a policy that’s enough to cover your final expenses, were something to happen to you. Or, if you plan to get married and start a family in the coming years, buying a policy while you’re young and healthy is a great idea.

Let’s say you’re a bit older – maybe you’re in your 30s and own a home, where you live with your family. In that case, you certainly want to consider life insurance coverage. You may want to buy a policy that will replace your income for a certain number of years, provide for your children’s college expenses, and even pay off your mortgage balance.

No matter how old you are or your financial situation, the same rule rings true: the earlier you buy coverage, the better. You’ll pay less immediately and over the length of your policy if you buy when you are younger and healthier.

Buy from a Company That Will Grow With You

Whether you’re 25 or 55, your needs will change over the years. You may have children, who will then grow up. You might buy a home, which you will then pay off over time. And you may even have a spouse, dependents, or aging parents who will rely on you for their own needs.

That’s why it’s important to choose a life insurance company that will grow with you over the years.

Pick a company that can meet your needs now and in the future. This may mean finding a life insurance provider that offers both term and whole life coverage. You might want to find a company that offers things like a living benefits rider, or even add-ons to protect your children.

The best time to buy life insurance was yesterday. The next best time is today. It’s important to pick a policy before you need it, and the younger and healthier you are, the better your rates will be.

If you’re not sure what kind of coverage best suits your life, or how much insurance to buy, give us a call. Our licensed agents will spend the time to help you decide what you need and guide you into the perfect life insurance policy.

Peace of mind starts at $14/month*

See Your Rate
*Sample quote is based on 35-year-old healthy male in California receiving a $250,000 10-year Term Life policy (Policy Form # I L1702) underwritten by Assurity Life Insurance Company.
ABOUT THE AUTHOR
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Stephanie Colestock is a freelance editor and personal finance writer, who is passionate about financial planning and getting out of debt. Her writing has appeared on authoritative sites such as Forbes, USNews, Daily Finance, and Dough Roller, among others. She graduated from Baylor University, but now lives in Washington, D.C. with her two young sons (who are learning how to wisely manage their own money).

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