When Should You Get Life Insurance?

You can consider buying life insurance at any age, especially if you have loved ones who are financially dependent on you and could potentially inherit your debt. Purchasing a policy earlier offers the advantage of lower premiums, which makes it wise to act sooner rather than later.

  • Written by
    Lindsey Crossmier

    Lindsey Crossmier

    Financial Writer

    Lindsey Crossmier is an accomplished writer with experience working for The Florida Review and Bookstar PR. As a financial writer, she covers Medicare, life insurance and dental insurance topics for RetireGuide. Research-based data drives her work.

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  • Edited By
    Lamia Chowdhury
    Lamia Chowdhury, editor for RetireGuide.com

    Lamia Chowdhury

    Financial Editor

    Lamia Chowdhury is a financial content editor for RetireGuide and has over three years of marketing experience in the finance industry. She has written copy for both digital and print pieces ranging from blogs, radio scripts and search ads to billboards, brochures, mailers and more.

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  • Reviewed By
    Eric Estevez
    Eric Estevez, Independent Licensed Life Insurance Agent

    Eric Estevez

    Owner of HLC Insurance Broker, LLC

    Eric Estevez is a duly licensed independent insurance broker and a former financial institution auditor with more than a decade of professional experience. He has specialized in federal, state and local compliance for both large and small businesses.

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  • Published: May 5, 2022
  • Updated: July 6, 2023
  • 10 min read time
  • This page features 10 Cited Research Articles
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How to Cite RetireGuide.com's Article

APA Crossmier, L. (2023, July 6). When Should You Get Life Insurance? RetireGuide.com. Retrieved April 17, 2024, from https://www.retireguide.com/life-insurance/when-do-i-need-life-insurance/

MLA Crossmier, Lindsey. "When Should You Get Life Insurance?" RetireGuide.com, 6 Jul 2023, https://www.retireguide.com/life-insurance/when-do-i-need-life-insurance/.

Chicago Crossmier, Lindsey. "When Should You Get Life Insurance?" RetireGuide.com. Last modified July 6, 2023. https://www.retireguide.com/life-insurance/when-do-i-need-life-insurance/.

What Age Should You Get Life Insurance?

A specific age shouldn’t dictate when you get life insurance — but rather your personal financial responsibilities.

If you have loved ones who are financially dependent on you, get a life insurance policy as soon as possible. Each year you wait, life insurance premiums increase by an average of 8% to 10%, according to the Farm Bureau Financial Services.

Getting life insurance coverage early on helps you access affordable premiums and the peace of mind that your family won’t face financial hardship if you were to pass away.

This isn’t to say those nearing retirement shouldn’t get life insurance. There are specific instances that a life insurance policy can cover medical costs, provide investment opportunities and offer affordable coverage options for end-of-life expenses.

Should I Get Life Insurance in My 20s?

If you’re in your 20s and burdened with student debt or car loans – or you have dependents – it’s worth considering life insurance coverage.

As a young adult, you can benefit from locking in a low, steady premium for years to come. And since many young adults are in good health when they’re younger, they’re also subject to more affordable premiums.

Benefits of Getting Life Insurance at a Young Age
  • Premiums typically under $20 a month for term policies
  • Can lock in lower premiums for lifelong permanent policies
  • You’re typically in good health, which means lower premium costs

Be sure to compare average costs with different life insurance companies to ensure you get the best price.

Monthly Premium Rates for a 20-Year Term Life Insurance Policy With a $500,000 Face Value
AgeMutual of Omaha Life Insurance CompanyTransamerica Life Insurance Company
20$20.43$15.73
*These cost estimations are for a woman at a preferred plus rate; meaning the policyholder has no health problems and doesn’t smoke.

Should I Get Life Insurance in My 30s?

If you’re in your 30s, you may have multiple kids, a mortgage, business loans or debt. Maybe you’re even beginning to prepare college funds for your kids. These are all important incentives to consider a life insurance policy.

Luckily, premium costs are still low when you’re in your 30s — typically around $15 a month. However, if you smoke, or have any unhealthy habits, this price could be much higher.

Monthly Premium Rates for a 20-Year Term Life Insurance Policy With a $500,000 Face Value
AgeMutual of Omaha Life Insurance CompanyTransamerica Life Insurance Company
30$20.43$16.15
*These cost estimations are for a woman at a preferred plus rate; meaning the policyholder has no health problems and doesn’t smoke.

It’s beneficial to purchase a life insurance policy with fixed premiums during this time as some premiums triple by the time you turn 50.

Life Insurance for Middle-Aged Adults (40s and 50s)

Those who are in their 40s and 50s tend to use life insurance to cover any outstanding mortgage costs or the potential loss of income for their family; others might use life insurance as a method of saving for retirement.

At this stage, premiums are starting to increase – sometimes nearly tripling. However, coverage is still important in your 40s and 50s if you’re juggling financial responsibilities.

Monthly Premium Rates for a 20-Year Term Life Insurance Policy With a $500,000 Face Value
AgeMutual of Omaha Life Insurance CompanyTransamerica Life Insurance Company
50$69.02$55.25
*These cost estimations are for a woman at a preferred plus rate; meaning the policyholder has no health problems and doesn’t smoke.

Depending on what provider you choose, some policies come with riders for free. Contacting an agent can help you determine what policy and rider options best suit your needs.

Life Insurance for People Over 60

Those who are over 60 and looking to get insured may want coverage for final expense costs or long-term care. Or, they may wish to leave an inheritance to help support loved ones.

Some life insurance policies cater directly to retirees, such as long-term care rider options, that can help cover expenses not included in Medicare.

Getting life insurance when you’re over 60 can be very costly. Compared to the other rates above, the premium for a 70-year-old woman is almost $700 for the same exact coverage. Therefore, it’s important to purchase a life insurance policy early in life.

Monthly Premium Rates for a 20-Year Term Life Insurance Policy With a $500,000 Face Value
AgeMutual of Omaha Life Insurance CompanyTransamerica Life Insurance Company
70Not Available$697.43
*These cost estimations are for a woman at a preferred plus rate; meaning the policyholder has no health problems and doesn’t smoke.

Luckily, most people who want to get life insurance later in life don’t need $500,000 of coverage for a 20-year term.

Burial life insurance policies offer a death benefit to cover funeral and memorial service expenses. According to the National Funeral Directors Association, funerals cost around $7,848.

A 70-year-old woman can purchase a simple burial policy with a $10,000 death benefit for as low as $63.90 a month. This is a far more affordable option in comparison to the $697 term life premium.

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What Should You Consider When Deciding To Buy Life Insurance?

Before you buy life insurance, consider how long you will need coverage and how much of your income you must account for your financial responsibilities.

Financial experts recommend purchasing coverage worth eight to 15 times your annual salary. For example, if your annual salary is $45,000 and you want to have eight times that yearly coverage, you should purchase a policy worth at least $360,000.

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Life Events

Specific key milestones, like having a baby or opening your own business, can trigger the need for life insurance coverage.

Life Events That Trigger the Need for Life Insurance:
Getting Married
Once you have a spouse, you’ll want to account for their financial well-being. Purchasing a life insurance policy ensures they’ll be financially stable if you pass away.
Having Children
In 2023, the average projected cost to raise a child from birth to age 17 is $310,605, according to The Brookings Institution. You may want to also consider college costs for your child. A life insurance policy can help cover these expenses.
Buying a House
Account for outstanding mortgage costs to ensure your family doesn’t lose the house if you were to pass away.
Starting a Business
A life insurance policy can provide your company and employees with financial protection in the event you pass away suddenly.
Caring for Aging Parents
You can set up your death benefit to cover long-term care costs for your parents if you were to pass away.

Family & Dependents

If you have family members or dependents who rely on you financially, then a life insurance policy can provide security for them in case you die.

Your benefit amount should fluctuate based on how many people depend on your income. For example, a single person with no children will need less coverage than a married individual with three kids.

You can choose a family member or dependent as your primary and secondary beneficiary for your death benefit. Make sure you name at least two beneficiaries to avoid your death benefit being paid to your estate.

Health

As you age, you’re more likely to develop health issues – which may raise your premium price. If you have a serious health problem, you could even be denied coverage.

Did You Know?
According to the U.S. Centers for Disease Control and Prevention, 85% of older adults have at least one chronic health condition.

Consider the state of your health when looking to purchase a life insurance policy. Simple lifestyle changes like quitting smoking could lower your premium.

You can also reduce costs by sharing medical documentation with your life insurance provider to prove you are actively treating your condition.

Career

If your job –such as a roofer or police officer – involves life-threatening tasks, then life insurance can provide peace of mind for your dependents who rely on you.

However, a high-risk career will likely raise your premiums or make it difficult to gain life insurance coverage at all.

Some companies offer group life insurance to their employees, offering coverage for a more affordable price. Ask your employer if this is an option if you’re considering purchasing a policy.

Choosing the Right Life Insurance Policy Based on Age

Your age influences which life insurance policies you’re eligible for and how long you can get coverage for.

There are two main life insurance policy types: term and permanent.

Term Life Insurance

Due to their affordability, term policies are best suited for young individuals looking for coverage for a set number of years. Term offers temporary coverage, typically between 10 to 30 years. For example, if you recently gave birth to a child, a 20-year term policy could fit your needs.

If you’re above a certain age, you may not qualify for a term policy. For example, State Farm has age limits on its term policies.

Eligibility for Term Policies
Term LengthEligible Age Limit
1075
2065
3045
Source: State Farm

The exact eligibility ages vary with each life insurance company, but if you’re older, you typically can’t qualify for a 30-year term policy.

Permanent Life Insurance

The best age for permanent life insurance varies, depending on the type of permanent life insurance you’re considering.

There are two main types of permanent life insurance, whole and universal. Both offer lifelong coverage with a cash-value component that provides investment opportunities.

You can tap into your cash value component to cover long-term care or general health care costs, which makes this type of policy well suited for those nearing retirement.

Burial insurance, a type of whole life policy, is best for those who only want final expense costs covered. Note that there are age limits with burial policies. For instance, with Mutual of Omaha, their burial policy is only available for people between 45 and 85 years old.

What Happens If You Wait To Buy Life Insurance?

If you wait to buy life insurance, your premium costs will become more expensive every year. You also risk financial pressure on your loved ones if you pass away with no plans to support them. The severity will range based on how many people financially depend on you and how much existing savings you have.

According to the 2023 Insurance Barometer Study, 29% of millennial parents put off buying life insurance due to not knowing how much coverage they need or which type of life insurance to buy.

Purchasing a policy at a young age can help you obtain the best premium price. However, be sure to compare quotes with different insurance companies before purchasing a policy.

Frequently Asked Questions About Life Insurance

How much life insurance do I need?
You need enough life insurance to cover your burial costs, loss of income and any outstanding debts or other financial responsibilities you want to take care of after you’re gone.
What are the benefits of life insurance?
Life insurance provides you with the peace of mind that your loved ones won’t suffer financial instability if you were to pass away. Some types of life insurance also include investing or long-term care coverage benefits.
What are the risks of life insurance?
There are different risks for life insurance, depending on what type of life insurance policy you have. With term life insurance policies, you risk no death benefit if you outlive your policy. With permanent policies, you can face investment risks.

Editor Malori Malone contributed to this article.

Last Modified: July 6, 2023
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10 Cited Research Articles

  1. LIMRA. (2023, April 24). New Study Shows Interest in Life Insurance at All-Time High in 2023. Retrieved from https://www.limra.com/en/newsroom/news-releases/2023/new-study-shows-interest-in-life-insurance-at-all-time-high-in-2023/
  2. National Institute on Aging. (2023, January 25). Talking With Your Older Patients. Retrieved from https://www.nia.nih.gov/health/talking-your-older-patients
  3. Insurance Information Institute. (2023). What Is a Beneficiary? Retrieved from https://www.iii.org/article/what-beneficiary
  4. Mutual of Omaha. (2023). Whole Life. Retrieved from https://www.mutualofomaha.com/life-insurance/whole-life-insurance
  5. Mutual of Omaha. (2023). Term Life Insurance Quotes. Retrieved from https://www.mutualofomaha.com/life-insurance/term-life-insurance/quote
  6. Mutual of Omaha. (2023). Guaranteed Whole Life Insurance. Retrieved from https://www.mutualofomaha.com/promo/life-insurance/457026
  7. State Farm. (2023). Select Term. Retrieved from https://www.statefarm.com/insurance/life/term-life/select-term
  8. Transamerica Corporation. (2023). Policy Explorer - Get a Quote Transamerica. Retrieved from https://www.transamerica.com/lifepolicyexplorer/get-quote
  9. Farm Bureau Financial Services. (2021, February 5). How Does Age Affect Life Insurance? Retrieved from https://www.fbfs.com/learning-center/age-factor-into-life-insurance
  10. Transamerica Corporation. (2023). Policy Explorer - Get a Quote Transamerica. Retrieved from https://www.transamerica.com/lifepolicyexplorer/get-quote