At What Age Should You Buy Life Insurance?
Dan Levenson March 05, 2020
No matter how old or young you are, you’re never going to be at a better age to buy life insurance. Here’s why.
Your Age and Life Insurance Cost
Life insurance providers consider age as a major factor in determining how much the insured pays in premiums. Generally, the younger you are the lower your premium will be. From a cost perspective, the optimal age for you to buy life insurance is the age you are now since no one will ever be younger.
If you’re an adult under age 35, buying life insurance now could yield significant cost savings. Here’s an example to illustrate how much you can save.
Catherine is 41 years and in good health. She’s a breadwinner with two young children. As Catherine researches her life insurance options, she’s surprised to discover she would have saved a lot of money if she had bought life insurance when she was just a few years younger.
In the end, Catherine purchases a 30-year term life insurance policy with $350,000 in coverage. Her annual premium is $625. Since she took out a guaranteed level premium policy, her premium payments won’t change over the life of the policy. Catherine tells her 29-year-old sister Jennifer that she should consider getting life insurance now.
Jennifer and her husband don’t have kids yet, but she tends to trust her older sister’s advice. Like her sister, Jennifer is in good health, but she’s not into doing research. Therefore, Jennifer decides to get a policy with the same term and coverage level as Catherine. Jennifer pays $400 per year for her coverage.
At the end of 30 years, Jennifer will have paid $6,750 less in premiums than Catherine. Although the sisters took out the same policy, Jennifer saves thousands of dollars because she was younger when she bought her life insurance policy.
The Advantage of Buying Life Insurance While Healthy
Your health is another major factor in the cost of life insurance. Since you’re more likely to be healthier when you’re younger, it makes sense to buy life insurance as early as possible.
As you age, your risk increases for developing chronic illnesses such as type 2 diabetes and cancer. Life insurance options become more expensive and more limited once someone is diagnosed with a chronic condition.
Your Current Age Is Best for Buying Life Insurance
To recap, as you get older, your life insurance premiums get higher. You’re never going to be at a better age for life insurance from a cost perspective.
Despite that, some people skip life insurance is they don’t see a need for this vital coverage. A false sense of invincibility keeps them from buying life insurance now while the rates are best. They may even have dependents. Yet, these breadwinners neglect life insurance. They just can’t envision the circumstances that would cause their loved ones to struggle to survive without their support.
Another reason individuals don’t buy life insurance when they can get the best rates is they don’t have dependents–yet. They’re waiting until they’re older to get life insurance. They figure it’s better not to buy the policy until they have dependents who need the coverage. As shown by the example of Jennifer and Catherine, delaying life insurance until you’re older with greater responsibilities can cost you thousands.
Although lower insurance premiums typically are available to adults in their twenties and thirties, it’s not too late for older adults to get life insurance. InsureYourCompany.com can help adults of any age find a policy to suit their needs. When you’re ready to review your life insurance options, contact us.