If you’re single with no children, life insurance may not be a priority. But if you have a family or are planning on starting one soon, or if you have debt that your estate would be responsible for should you die, you should consider a life-insurance policy. The best time to buy life insurance is usually as soon as possible. That’s because the younger and healthier you are when you purchase a policy, the lower your premium will generally be.
What’s The Best Age To Get Life Insurance?
Generally, the younger and healthier you are when buying life insurance, the more money you’ll save. As we age, we’re at increased risk of developing health conditions, which can result in higher mortality rates and higher life insurance rates.
You’ll typically pay less for life insurance at age 25 than at age 40. Waiting until age 60 may mean an even bigger rate increase and limited policy options.
When Should You Get Life Insurance?
You need to buy life insurance when somebody else depends on your income.
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Life insurance will provide your partner or children with a lump sum of tax-free money in the event you die prematurely. We know that’s not fun to think about. But if you have a spouse, children, or anyone else who depends upon your income, getting life insurance is a priceless gift.
And, the truth is, the younger you are, the lesslife insurancecosts. Although most people don’t think about life insurance when they’re single and childless, there’s an argument to be made to buying a policy anyway if you expect to one day start a family.
Do I Need Life Insurance?
Although age may play a role in how much life-insurance coverage you need, the decision to buy life insurance has nothing to do with age. So when should you get life insurance?
- If have children under the age of 18, you should get life insurance.
- If you’re single and childless, you might not need life insurance yet.
- If you’re married and your spouse relies on your income (even some of it), you should get life insurance.
- If you have enough savings or investments to provide for your family after your death, you might not need life insurance.
Get Life Insurance if You Have a Family
In most cases, you need life insurance when you start a family. Because life insurance isn’t for you — it’s to provide for your family in case you die and can no longer take care of them.
In addition, there may be special situations in which you don’t have a family of your own but may still want some life insurance protection.
For example, if a parent has cosigned a large student loan or a mortgage for you, a modest life insurance policy could pay their share in the event something happens to you.
Most people begin to think about life insurance when they have children and want to ensure their financial protection. That’s what my wife and I did.
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Shortly after our daughter was born, we both took out term life-insurance policies in amounts that would replace each of our individual income for 20 years and cover the expected cost of our daughter’s college tuition.
When our second child was born, we increased our policy to take our son’s expenses into account.
Get Life Insurance While You’re Young
Life insurance gets more expensive the older you get. Life insurance is also less expensive the healthier you are. Even if you’re in the best health today, you never know what tomorrow will bring.
Common health conditions that tend to crop up with age, like high blood pressure and diabetes, can make life insurance significantly more expensive. A number of conditions can also prevent you from getting life insurance at all.
The bottom line is, even if you’re unmarried and childless now, buying life insurance while you’re young and healthy can be a savvy financial move that you’ll be grateful for years down the road.
Get Life Insurance if You’re Married
Even if you don’t have (or plan on having) kids, you should buy life insurance for your spouse.
Life insurance is obviously critical if your spouse doesn’t work and relies upon your income. But, even if you both work, chances are you rely on both incomes to support your lifestyle.
If one of you were to die, the surviving spouse would perhaps need to sell your home or make other significant changes to life on just one income.
In this case, life-insurance would ensure the surviving spouse has the financial resources to continue making ends meet, at least for a number of years.
What Life Insurance Should I Get When I Have a Baby?
If you have children, life insurance can provide needed financial support in the event of an untimely death.
In terms of amount, the death benefit should be enough to cover all your existing debts and obligations, replace your income for the years that your children would still rely on you, and be able to also pay for things like a college education.
When Should I Buy Life Insurance for My Child?
Life insurance policies can be taken out on children soon after they are born.
A permanent life insurance policy for a young child will come with a far lower premium than for when that person is an adult. At age 18, you can then transfer the insurance policy over to the child so they will have coverage going forward.
What Type of Policy Is Right For Me Based On My Age?
Research the types of life insurance and which life insurance policy is for you, but start with these general guidelines:
1. Over 65 Years Old
Final expense coverage (also known as burial insurance) may be a good option for seniors who are only concerned with covering end-of-life expenses.
This type of policy is both affordable and accessible for older individuals. The smaller death benefit is often used to pay for funeral and burial expenses, removing or reducing that burden for your loved ones. Learn more about how burial insurance works.
2. 30 to 60 Years Old
Whole life or universal life policies, if you can afford permanent coverage, can provide more financial security for your loved ones. But if you have a lot of debt, you may opt for a high-value term life insurance policy until the debt is paid down.
If you don’t need a large death benefit, a mid-range permanent life policy can provide lifelong coverage and grow cash value over time. If affordability is your main concern, opt for a term policy.
3. Under 30 Years Old
For most young people, term life-insurance is popular because it’s more affordable. You’ll need to choose a term length, and coverage will only last for the term you choose. A popular choice is to have the policy last as long as your children will depend on you, or for as long as you plan to work. If you’re able to afford it, a whole life policy provides coverage for your entire life.
How Much Life Insurance To Get
As a rule, you should get as much life insurance as your dependent(s) will need to continue their lifestyle without your income.
Depending on a few factors, this could be millions of dollars, or it could be a more modest amount. To determine how much life insurance you need:
- Multiply your annual income by the number of years you want the insurance to cover.
- Add any fixed expenses (like kids’ college tuition).
- Finally, subtract any non-retirement savings or investments you have that could cover some of these costs in lieu of an insurance benefit.
Alternatively, use our simple life insurance calculator to quickly get an approximation of how much life insurance you should buy.
Assets Decrease Life Insurance Need
The more money you have saved, the less life insurance you need to buy. Because the ultimate goal of life insurance is to replace your income for your family, savings and investments can save the same purpose.
Some people like to buy more life insurance than they need (simply because term life insurance is relatively cheap for young applicants).
But if you determine, for example, that your family would need $1 million to survive without your income, and you have $500,000 in savings, buying a $1 million life insurance policy would be overkill.
A $500,000 life insurance policy and your $500,000 in savings would cover your family’s needs.
Lifestyle Cost
Yes, your family is one consideration, but your cost of living also comes into play. If you have a mortgage on your home, for instance, your untimely death would leave your survivors with the responsibility of paying it.
Look at your overall monthly expenses and determine how much of a hole there would be if your income was gone. Not only will this help you determine whether you need life insurance, but you can also decide how much of a policy you need to ensure your survivors can pay those bills long after your death.
Business ownership
If you work for someone else, you’ll only need to worry about your personal expenses. But what happens when you run a business? If you have a business partner or employees, you’ll need to think about the effects of your death. You could set up a life insurance policy with your business partner as the beneficiary to keep things going.
But even if you’re a sole proprietor, a life insurance policy can be a good move. Chances are, you have some business debts that would have to be paid off if you were no longer around. Life-insurance gives your loved ones the funds they need to tie up all the loose ends.
Final expenses
There’s also the matter of funeral expenses. Life-insurance will give your family the funds necessary to pay all of those final expenses and get the closure they need. Look at your savings and determine if you have enough to cover those costs. If not, a life insurance policy could be what your family needs to cover everything.
What Policy Length Should I Consider?
Deciding which term length is best for you will depend on your age and certain life events like having children, buying a home, or starting a business.
Generally, you should choose a term length that covers the period of life when your family will have the highest costs and would be at the most risk if you passed away.
Most term insurance policies last 10, 20, or 30 years. There’s also a one-year, short-termlife insurance option through eFinancial if you’d like to try out a low-commitment policy first.
According to LIMRA’s 2022 Insurance Barometer Study, 44% of Americans say their families would feel financial hardship within six months of a wage earner passing away. Life insurance can be your loved ones’ much-needed safety net.
How To Get Life Insurance
Get a life-insurance quote online, or call 1-866-912-2477 to speak with a licensed Progressive Life by eFinancial representative about your options.
Although there are dozens of different life insurance products that can quickly get complicated, the vast majority of people only need simple term life insurance. Fortunately, it’s easy to buy term life insurance online.
A number of the best life insurance companies for young adults make it possible to buy life insurance entirely online. One of the top options, Ladder Life, is 100% digital when you when you apply for $3M in coverage or less. That’s no doctors, no needles and no paperwork.
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That said, most traditional life insurance policies will require a brief medical exam as part of your application. Insurance companies make this process relative easy — they’ll send a nurse to your home or office at a time that’s convenient for you.
If you’re afraid of needles or otherwise want to avoid the hassle, some insurers offer no medical exam life insurance policies. Just know that 1) you’ll pay slightly more for these policies and 2) you’ll be limited in how much coverage you can buy. Most no medical exam life insurance policies are limited to $1 million in coverage.
You should also take the time to learn more about the differences between term life insurance and whole life insurance (sometimes referred to as permanent life insurance). Lauren and I stuck with simple term life insurance, and recommend you do, too.
Reasons Why You Should Consider Buying Life Insurance
Reasons to buy insurance are different for everyone. But the decision to purchase insurance is, at its core, all about providing financial security for yourself and the ones you care about. Learn why life-insurance is important, and who needs it.
Why is life insurance important?
Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. It provides financial security, helps to pay off debts, helps to pay living expenses, and helps to pay any medical or final expenses.
Life Insurance Provides Cash When You Need It Most
Your life insurance policy can deliver a specified sum of money when you need it. Upon your death, your family will receive your policy payout immediately.
And that death benefit is generally not subject to federal income taxes. For example, a $500,000 policy provides $500,000 in death benefit proceeds directly to your beneficiary.
Reasons To Buy Life Insurance
Life insurance can give you lasting peace of mind in terms of the assurance that you have provided a legacy. That’s because the right coverage can offer a valuable combination of benefits, many guaranteed by the claims-paying ability of New York Life—so that you and your loved ones know exactly what you’re getting.
Of course, you have to make a long-term commitment to paying premiums and keeping the policy in force. Some of the most common reasons for buying life-insurance include:
- Guaranteed Protection
If you have a family, a business, or others who depend on you, the life insurance benefit of a whole life policy acts as a financial safety net. When you die, your beneficiaries will receive a lump-sum payment that is guaranteed to be paid in full (provided all premiums are paid and there are no outstanding loans). It’s essential protection that you can count on to be there for your loved ones when needed. - Income Replacement
Imagine what would happen to your family if the income you provide suddenly disappeared. With whole life-insurance, you can help make sure that your loved ones have the money they need to help:
- Pay the mortgage
- Afford childcare, health care, or other services
- Cover tuition or other college expenses
- Eliminate household debt
- Preserve a family business
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- Tax-free Benefit
Your beneficiaries will be able to enjoy every penny you leave them. That’s because the benefit of a life insurance policy is generally passed along federal income tax free. - Guaranteed Cash Value Growth
As you pay your premiums, your Whole Life policy builds cash value that is guaranteed to grow—tax deferred—and can help meet a variety of financial goals:
- Supplement retirement income
- Fund a child or grandchild’s education
- Pay off a mortgage
- Protect existing assets
- Establish an emergency fund
- Dividend Potential
One of the benefits of purchasing whole life insurance from New York Life is that you will be eligible to receive dividends.4 Although they are not guaranteed, when dividends are awarded, you can take them in cash, use them to offset your premiums, or use them to buy paid-up additional insurance that increases your coverage and cash value, use them to offset your premiums, or take them in cash. - Optional Riders
There are several ways to tailor a whole life policy to meet your individual needs. For an additional cost, you can use riders to purchase additional protection without further underwriting, to pay your premiums if you become disabled, to use some of your face amount to pay for chronic illnesses, or to purchase coverage for your children. Your agent can help you decide if any of these riders are right for you.
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