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Thinking about buying life insurance? You’ll want to get it sooner rather than later. Your risk of dying increases as you age, which is why most life insurance policies won’t cover you once you hit a certain age.
It gets even more complicated if you have children who rely on your income. If something were to happen to you, how would they be affected? Do you provide for them financially? Are there other adults in their lives who could help pick up the slack in the event of your passing?
If your answer is no to any of these questions, it may be time to buy some life insurance. But not just any life insurance policy will do. Many different types offer a variety of coverage and premiums. So before diving head first into a new policy, let’s take a look at some pros and cons of getting insured at various ages:
20-Year-Olds: Young, Wild and Free
If you’re a 20-year-old and don’t have a ton of money or assets, you may find that it’s relatively easy to get life insurance. That’s because in addition to medical tests and background checks, insurance companies will also look at your income and debt load to determine if you’re a good bet. If you’re still in school, working part time, or don’t have a lot of expenses, you’ll probably have a lower debt load and make more than enough to cover your expenses. This will help your chances of getting coverage on a low-cost policy. While it’s always a good idea to get some type of life insurance, it may be especially important for 20-year-olds. That’s because if something were to happen to you, your family would likely qualify for life insurance payments from your provider.
The advice is, the younger the better. This is because you’ll qualify for lower premiums at a younger age, where the risks are smaller. As you get older, you could develop health problems that make insurance more expensive or even disqualify you from purchasing a plan.
30-Year-Olds: No Longer Solid Kid Blood
If you’re in your 30s and childless, you’ll probably qualify for “term life insurance”. This is the most basic type of policy and provides coverage for a set amount of time, usually 10 or 20 years. The premiums will be much lower than those of a standard policy, but there are some limitations. Most term policies have what’s called a “surrender period”. This is the amount of time you have to pay back any money the insurance company has paid out. If you lapse the policy before the “due date”, you’ll have to pay back the full amount. And if you die before the policy expires, your beneficiaries will not receive a payout. Term policies are best for young, healthy individuals who don’t have dependents to support. If you do have dependents, you’ll want to consider getting a “permanent” life insurance policy when you’re in your thirties.
40-Year-Olds: You’re at your Prime but Still Have Time
If you’re 40 years old, you’ll probably want to get a “whole life” policy. The name might sound a bit ominous but don’t be scared. Whole-life policies are long-term, low-cost policies that are designed to provide a substantial payout once they come due. While term policies offer cheaper premiums, they also have “surrender periods”. If you need coverage to last a long time, you’ll likely get a better deal with a whole-life policy. Whole-life policies have set premiums, meaning they don’t go up as you get older. At the same time, they won’t go down if you’re still young and healthy and you can get a lower premium.
50-Year-Olds: You’re Quicker and Slicker Than a Snake
If you’re 50 years old, you’re still in a pretty good position. You’re probably eligible for low-cost term policies, but may be offered better rates with a “whole life” policy. Whole-life policies last as long as you live, and your payments are locked in during the first few years. At this point, you’re just putting down a deposit and paying for the right to lock in a low rate. You may also qualify for “term insurance” at this age. Term insurance lasts for a set amount of time, usually 10 or 20 years. The premiums will be lower than those of a permanent policy, but if you die after the policy has “lapsed”, your beneficiaries will not receive a payout.
So Which Age Should You Get Life Insurance?
The advice is, the younger the better. This is because you’ll qualify for lower premiums at a younger age, where the risks are smaller. As you get older, you could develop health problems that make insurance more expensive or even disqualify you from purchasing a plan.
Insurance is all about risk management, so choose the best policy for your situation. If you have young children, you’ll probably want a more long-term policy that will last as long as they’re in school. If you want to leave a significant amount of money to your family, consider getting a whole life policy. If you have a large student loan debt, you’ll probably want a shorter-term policy with a lower monthly payment. In the end, the best age to get life insurance is the age you’re at right now. Because there’s no way to predict the future, and life throws curve balls at any age.
