Young people especially tend to put off thinking about when to get life insurance. However, the younger and healthier you are when purchasing life insurance, the more money you’ll save. Life insurance rates vary in cost as you get older, but the price typically increases. As we age, we’re at increased risk of developing underlying health conditions, which can result in higher mortality rates and higher life insurance rates. You’ll typically pay less for term life insurance at age 20 than if you wait until age 40. Waiting until age 60 usually means an even bigger increase in price.
Life insurance in your 20s and 30s
At this stage in your life, you may be putting off picking up life insurance in favor of paying off student loans, saving to buy a home, or starting a family. However, for each year you wait, you’ll likely pay more in life insurance premiums. Another benefit of having a life insurance policy at this age is that it can be used to pay off debts owed by your estate.
Adults under 30 may prefer a term life insurance policy due to the lower premium costs. At younger ages, income may be scarce. Opting for an affordable policy is better than owning no policy at all. Look for a policy that can cover funeral costs as well as any outstanding debt. A good rule of thumb is to find a policy worth five to 10 times your income, but if you have no significant debt, two to three times your income plus funeral expenses will likely be sufficient.
Life insurance for people over 50
If you’re over 50 but in excellent health, getting life insurance shouldn’t be an issue. However, if you’re a smoker or have any medical concerns, you can expect to pay a higher premium. And if you’re looking for life insurance over 60, term life insurance is your best option, as the premium will be lower and remain consistent throughout the policy’s term.
Life insurance for married couples
Without life insurance, your spouse may be responsible for your debt if you pass away. To ensure your family is provided for in the future, it’s recommended to get life insurance coverage that’s 10 to 12 times your annual salary.
What type of policy is right for me based on my age?
Under 30 years old: For most young people, a term life policy is a popular option because it’s more affordable. However, as you age and are able to spend more on insurance premiums, a whole life policy allows you to purchase higher coverage amounts for a set price that won’t increase. Whole life policies become more expensive as you age, so the younger you are at the time of purchase, the more affordable it will be over the span of your life.
30 to 60 years old: Whole or universal life policies can be good options, depending on your financial situation. If you carry a large amount of debt, you may opt for a high-value term life insurance policy until the debt is paid off. If you don’t need a large amount of coverage, a mid-range universal life policy is a good investment due to its ability to grow over time.
Over 65 years old: For seniors with little to no debt who wish to save money, final expense coverage is an affordable option that often has no medical exam requirement. It covers the cost of funeral and burial expenses without placing a financial burden on the family.
What policy length should I consider?
Deciding which term length is best for you will depend on your age and certain life events such as having children, buying a home, or starting a business. The length of most term insurance policies is typically 10, 20, or 30 years, although many companies offer options in five-year increments as well.