The best life insurance companies for Generation X-ers

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The best life insurance companies for Generation X-ers

There are a few points in life that make good times for buying life insurance: When you’re paying off student loans that have a cosigner, when you buy a house, when you have kids. Most people will go through these events when they’re in their 20s or 30s. But that doesn’t mean it doesn’t make sense to buy life insurance a little later on. Generation X-ers are entering their 40s and 50s now, and while they may have outgrown flannel and grunge, they might not have outgrown life insurance just yet. They may still need to buy life insurance, and they should make sure they’re picking the right company for them.

The best life insurance companies for Gen X-ers

It’s important to get life insurance quotes from different companies. That’s because they each have their own criteria for how they set rates. Some may be more affordable than others for diabetics, for instance.

One important thing to note is the older you get, the more your life insurance will be. That’s true across the board, no matter the life insurance carrier. But there are still differences in cost. Here are some sample costs for a healthy male in New Jersey shopping for a $500,000, 20-year life insurance policy at ages 40, 45, and 50.

Monthly/annual premium, $500,000/20-year term life insurance policy*
Carrier Age 40 Age 45 Age 50
Protective $28.38 / $330.00 $49.45 / $575.00 $75.68 / $880.00
Pacific Life $30.17 / $354.99 $50.06 / $588.99 $75.99 / $893.99
AIG $30.62 / $354.00 $50.08 / $579.00 $78.20 / $604.00
Banner Life $33.25 / $379.99 $50.94 / $582.17 $77.00 / $880.00
Principal $31.50 / $360.00 $51.63 / $590.00 $78.66 / $899.00
Lincoln $38.95 / $445.00 $51.59 / $589.50 $78.72 / $899.50
Prudential $42.00 / $480.00 $53.38 / $610.00 $84.88 / $970.00
Mutual of Omaha $33.47 / $382.50 $54.47 / $622.50 $85.09 / $972.50
Transamerica N/A N/A $95.46 / $1,100.00
SBLI $36.92 / $424.35 $59.93 / $688.85 $96.06 / $1,104.10

*Based on New Jersey rates for a healthy male

Important to note: Life insurers will often provide a discount if you pay for your policy on an annual rather than a monthly basis. It costs more upfront but saves money in the long run, like buying in bulk.

As you can see, choosing the wrong carrier can cost you thousands of dollars over the life of your policy. Price isn’t the only thing you should base your decision on – some carriers have a faster application time, others are more digital-friendly, and so on – but it’s important to keep in mind so life insurance helps your financial future rather than breaks your budget.

Laddering your life insurance

What is a Generation X-er? Someone who is still paying off their mortgage, saving for their kids’ college, planning for retirement, and more.

But they’re also someone who is pretty far down these paths – a Gen X-er (hopefully) has more saved for retirement than a [Gen Z-er] – and might need less protection soon. They’re close to paying of their house, for instance, so do they really need to be paying the same for their life insurance 10 years from now when they don’t have a mortgage anymore?

The answer is no – and they don’t have to with laddering.

Laddering is buying multiple life insurance policies that have staggered end dates. There are two benefits to this. First, you don’t pay for policies that you don’t need. Instead of paying for a $500,000, 20-year policy, you might buy three policies whose coverage totals $500,000. But one expires after 10 years, another after 15 years, and for the last five years you’re only paying for, say, a $50,000 policy to cover a funeral and any unforeseen or lingering debts.

It’s also a good way to save money in the long run. Shorter policies with less coverage are cheaper than long or large policies. Even adding the costs together, you’re likely to save money. Laddering can cut your life insurance spending in half.

If you still need protection for a decade or two, but not that much protection, laddering lets you have your cake and eat it too.

Riders Gen X-ers should consider

Riders let you customize a life insurance policy to tailor it to your needs. If you’re getting a policy later in life, you might make sure you have some of these riders in place:

  • Disability waiver of premium rider. This allows you to forgo payments on your policy if you become disabled without the policy being canceled.
  • Accelerated death benefit rider. If you become terminally ill, you can access your death benefit to help pay for medical bills.
  • Child rider. Life insurance usually isn’t necessary for children, but a rider that adds a small benefit to your policy that triggers if your child dies can be helpful to pay for burial costs.
  • Long-term care rider. This will allow you to take money from your benefit to pay for a nursing home, a private nurse, or other components of long-term care.

Keep in mind some riders add an extra cost to your policy, while others are included for free. Be sure to talk to an insurance expert to find out which ones you need and what they might cost you.

Being a Gen X-er can feel like an awkward middle ground where you need life insurance, but not for very long. Luckily, there are options out there. Compare quotes to find the best life insurance company for you, and don’t forgo protection you may need, even if it’s just for a little while.

Looking for the best life insurance companies for specific situations? See our full list here.

Image: Geber86