When 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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

Editor Malori Malone contributed to this article.