Life Insurance For Every Age
Learn more about your life insurance plan options and how your needs may change as you age.
Purchasing a life insurance policy may be beneficial if you have family members who depend on you financially. But the right time to buy a life insurance policy is different for everyone. Below, we examine what you should consider when purchasing life insurance in your 20s, 30s, 40s and beyond.
Life Insurance In Your 20s…
Whether you’re getting married, starting a family or working to pay off student loans, your 20s should be the time you start thinking about life insurance.
Although you may think you’re too young for a policy, it’s never too early to plan for your long-term financial commitments. Children and spouses aren’t the only people who may be affected if you die unexpectedly. You may be supporting your parents. With a life insurance policy, you can help your parents' ability to afford their necessities and access long-term care if something were to happen to you.
The main advantage of buying life insurance in your 20s is that you might be able to purchase a higher coverage term policy for a more affordable monthly premium. If you plan on starting a family or buying a house, you can get a life insurance policy early. Term life insurance policies can last for up 40 years, and if you buy early, you may be able to lock in a lower premium that you will appreciate in the decades to come.
In Your 30s...
If you have a family, life insurance is a purchase you can make to help the people you love have the financial support they may need, even if something were to happen to you. If you were to die, who would pay for your children’s college tuition? Your outstanding student debt? The mortgage on your house? These are some common uses of life insurance death benefits, though your beneficiaries may use them however they wish.
Waiting too long to get life insurance could make it more expensive. If you wait until you develop a serious medical condition, you may not be able to get an affordable policy (or a policy at all).
Some financial professionals believe that the best time to buy affordable life insurance is when you are still young and healthy. And when you’re in your 30s, life insurance may be less expensive than you think. In LIMRA’s 2016 Insurance Barometer study, surveyors found that participants overestimated the cost of an average 20-year, $250,000 term life insurance policy for a 30-year-old by more than twice its actual cost.2
In Your 40s…
Your 40s can be a time of changing commitments and unexpected financial hurdles, making it an important time to keep life insurance on your radar, even if you already have a policy.
More and more people are raising young children in their 40s. Regardless of age, new parents might want to consider buying life insurance to offer some financial protection for their children.
If you already have a policy, but you purchased it based on your income and debts at the time, your 40s may be the time to revisit it. Whether you've moved up an income bracket or acquired new obligations, now may be a good time to purchase more coverage or a different policy while you can still find affordable premiums.
In Your 50s…
Finding an affordable life insurance policy in your 50s might take more time than if you were buying one in your 30s or 40s, but it’s still not too late to get the coverage you may need.
Most insurance companies have a maximum age for selling term life policies, but these can vary depending on coverage and length of plan. You may be able to apply for a 30-year term life plan up to age 55 in some cases. You may also be able to apply for shorter term plans after age 55. It depends on the insurance carrier you choose — your acceptance and rating class will be based on the results of your application and medical exam, if applicable.
If you want to purchase life insurance in your 50s but have health issues that may prevent you from obtaining traditional life insurance coverage, you may want to consider a guaranteed-acceptance life insurance policy.
Guaranteed-acceptance policies don't ask health questions, nor do they include a medical exam. However, they are usually the most expensive types of policy per dollar of death benefit and are typically the last resort for consumers who don't qualify for other types of policies. These plans may have a graded death benefit for an initial period of time. This means if you die during the graded death benefit period (usually one to two years after issuance), your beneficiaries won't recieve the full death benefit amount.
You might want to compare term life insurance plans before you commit to a guaranteed-acceptance policy. Different companies have different requirements for accepting applicants, and you never know which plans you might qualify for until you apply.
In Your 60s and Beyond…
Believe it or not, you can still get a life insurance policy in your 60s and 70s. Long-term policies (for 20 or 30 years) are likely out of the picture due to common age limits on policies, but you still may have options for coverage if you’re looking for a plan now.
If you just want to leave your loved ones enough to pay for your funeral, a guaranteed-acceptance life insurance is another option for older applicants. These plans typically pay out $25,000 or less to your beneficiaries at the time of death, which can be used to cover funeral expenses and other final costs. They are the most expensive type of life insurance, per dollar of coverage. These plans may have a graded death benefit for an initial period of time. If you die within the first year or two of the policy, your beneficiaries will receive a return of premiums — not the full death benefit amount.
But don’t rule out term life insurance just yet. Insurance companies may be more scrutinous with your application if you're looking for a plan for your senior years. But depending on your medical history, you may be able to find an affordable rate.
Information provided by lifeinsurance.org