Q

When should you get life insurance?

A

Getting life insurance in your 20s or 30s locks in low rates and saves money in the long run. Learn why younger is better when it comes to life insurance.

Rebecca Shoenthal author photo

By

Rebecca Shoenthal

Rebecca Shoenthal

Licensed Insurance Expert

Rebecca Shoenthal is an insurance editor and licensed Life, Health, and Disability agent at Policygenius in New York City. Previously, she worked as a nonfiction book editor. She has a B.A. in Media and Journalism from the University of North Carolina at Chapel Hill.

Published March 25, 2021|6 min read

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In their 20s and 30s, most people start setting financial goals: save for retirement, purchase a home, pay off student loans. But buying life insurance should be on that list too. 

The best time to buy life insurance is when you’re young – before you really need it – because the amount you pay for a life insurance policy is based on your age (among other factors). The older you get, the more likely you are to develop health problems or medical conditions that can increase your life insurance rates. 

Once you buy a policy, you lock in your premium rates for the entire term, which can range anywhere from 10 to 40 years. So while life insurance may seem like a low priority for a healthy person in their 20s or 30s, getting a good rate early will save you and your family money – up to hundreds of thousands of dollars based on Policygenius quoting data in 2021 – in the long run depending on the type of policy and term length.   

Key Takeaways

  • The older you get, the more you’ll pay for life insurance

  • Life insurance coverage should outlast your longest debts or youngest dependents

  • Premium rates are lowest when you’re in your 20s or 30s

What’s the best age to get life insurance?

Waiting to get life insurance until you already have people who rely on your income (such as children or a spouse) may seem like the best option. In fact, people without any dependents rarely need life insurance. But if you anticipate having dependents sometime in the near future, the best age to get life insurance is in your 20s or 30s because it will cost you less and save you money over time. 

What if my coverage won’t last long enough?

Besides when to actually get life insurance, term length is a top consideration when you’re picking out the best coverage for your needs. Terms can range from 10 to 40 years and you can lock in a low rate for as long as you think you’ll need insurance, based on your longest debts and dependents. 

For example, if you’re 25 years old, just bought a home with a 30-year mortgage and plan to have two children in the next five years, you’d want your life insurance policy to last until you are at least 55 years old. By that time, your mortgage will be paid off and your children will be over 18. In this scenario, we’d recommend you shop for a 30-year term life insurance policy. When the term expires, you’ll still need enough money to cover your funeral arrangements or other end-of-life expenses, but a traditional term life insurance policy will no longer be necessary. 

→ Learn more about what life insurance covers

Alternatively, if you’re a married 35-year-old, five years into a 20-year mortgage with no plans to have children, you’d probably only need a policy that lasts for 15 years. We recommend shopping for a 15- or 20-year term life insurance policy with a large enough death benefit that will enable your spouse to pay off the shared mortgage if anything happens to you.

Term conversion riders

As you’re approaching the end of your policy’s term, you may decide you still need life insurance. Most term life policies have the option to add a term conversion rider, which can transform your policy into a whole life insurance plan. 

Whole life insurance is more expensive than term life insurance, but it’s a great option if you can afford the premiums and are looking for permanent life insurance coverage that will last the rest of your life. Plus when you’re older, it’s likely you’re making more money than you did in your 20s or 30s and have the means to pay for a whole life insurance policy. 

You may need whole life insurance if you:

→ Compare whole vs. term life insurance

What’s the cost of waiting?

Take a look at the cost comparisons for a term and whole life insurance policy for a healthy 25-year-old male vs. a similarly healthy male in their 30s, 40s, 50s, or 60s.

$1 million dollars of life insurance coverage by age

AgeSex   20-year term life insurance policyWhole life insurance policy
25 Male  $44.82                    $688
   Female$34.18                    $600
35 Male  $50.44                    $1,020
   Female$41.56                    $852
45 Male  $110.40                   $1,641
   Female$83.51                    $1,293
55 Male  $282.34                   $2,688
   Female$200.45                   $2,153
60 Male  $493.42                   $3,437
   Female$351.76                   $2,799

Methodology: Sample term life premiums are for male and female non-smokers with a Preferred health rating based in Ohio; Life insurance averages are based on a composite of policies offered by Policygenius from AIG, Banner, Brighthouse, Lincoln, Mutual of Omaha, Pacific Life, Protective, Prudential, SBLI, and Transamerica and may vary by insurer, term, coverage amount, health class, and state. Not all policies are available in all states. Rate illustration valid as of 3/24/2021.

Whole life premium rates are calculated for male and female non-smokers with Preferred Plus health rating based in Ohio, obtaining a $1,000,000 whole life insurance policy payable until age 99. Individual rates will vary as specific circumstances will affect each customer's rate. Rate illustration valid as of 3/24/2021.

Buying life insurance early will save you a significant amount of money, up to hundreds of thousands of dollars depending on the type of policy, death benefit amount, and term length. 

For a 25-year-old male, the same amount of term life insurance coverage ($1 million in this example for a 20-year term) would cost them an additional $5.62 per month (or $1,348.90 over the lifetime of the policy) if they wait until age 35 to buy it (a nice chunk of change). And if they wait until age 45 to buy the same policy, it’ll cost them more than 10x what it cost in their 20s: $65.58 more per month (or $15,739.20 over the entire policy term). 

Whole life insurance rates are always going to be greater than comparable term rates because the policy never expires and often comes with a cash value savings component. But waiting to purchase a permanent policy will cost you too. Using the same 25-year old male example, they’d pay an additional $332 per month if they wait to buy life insurance until they are 35 (the lifetime cost will vary based on how long they live). They’d pay a whopping $953 more per month by waiting until they are 45 to purchase whole life insurance worth $1 million, which can end up costing upwards of $19,000 if they have the policy for just 20 years. 

→ Learn more about life insurance costs 

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Is there a maximum age to get life insurance?

Most people no longer need life insurance above a certain age. And while there’s no maximum age to get life insurance, it can be difficult to qualify for (and afford) traditional life insurance policies if you’re over age 85. 

Seniors looking for life insurance can expect to pay more for a policy than younger adults. See how premium rates compare for a healthy person in their 30s versus a healthy person in their 60s for $50,000 of life insurance coverage:

$50,000 of life insurance coverage in your 30s vs. 60s:

AgeSex   20-year term life insurance policyWhole life insurance policySimplified-issue whole life insurance policy
30 Male  $12.89                            $52.00                     $13.80                                      
   Female$11.39                            $45                        $13.31                                      
60 Male  $67.35                            $182.00                    $108.45                                     
   Female$106.22                           $149.00                    $102.17                                     

We used $50,000 in the above sample rates because those 55+ usually don’t need large face value life insurance policies. But even so, a 30-year-old female shopper can save $1,248 a year by purchasing a whole life insurance policy in their 30s vs. their 60s. Over 20 years, that adds up to nearly $25,000 in savings, which can be put toward other expenses, retirement accounts, or education costs.

Alternative life insurance options for older adults

Aside from term and whole life insurance, seniors have the following options to get life insurance coverage:

Although these options exist for seniors, they can be much more expensive for much less coverage. By enrolling in a life insurance plan early, you can avoid the added costs of non-traditional life insurance like no medical exam and final expense policies.   

Is it worth it to buy life insurance early?

Getting life insurance in your 20s or 30s really pays off and can save you hundreds of thousands of dollars over your lifetime. The money you save by buying a policy early can be put toward other meaningful expenses for your future family or financial planning.

The benefits of buying life insurance outweigh the downsides in most cases. However, expenses look like a bell curve over time for most people. 

When you’re young (unless you have private student loans), you don’t typically have dependents or expenses to cover if you die, except a funeral. But once you get married, buy a home or car, or have children, your expenses rise with mortgages, retirement planning, and child-care costs. Then, once the kids are out of the house and you’ve paid off your home, your expenses should go back down.

Buying a life insurance policy when you’re still young can get you over that middle hump – which you’re inevitably going to face in the future – at a lower cost. It keeps your loved ones insured and allows you to put thousands or more dollars toward other expenses. 

A Policygenius agent can help figure out how much life insurance you need and whether it’s the right time for you to buy coverage. 

Frequently Asked Questions

When should I get life insurance?

As soon as possible. If you’re in your 20s or 30s and anticipate needing life insurance in the next 10-40 years, you can lock in a low premium rate and save thousands of dollars by purchasing a policy now.

Is life insurance worth getting?

For people with dependents or debts, life insurance is a worthwhile expense that secures peace of mind and financial safety for your loved ones. Life insurance probably doesn’t make sense if you don’t have people who rely on your income, if you have a high net worth and can self-insure, or if you don’t plan on having a spouse or children in the future.

When can you get life insurance?

You can purchase whole life insurance at any age (even for a child, which we don’t generally recommend). To purchase a term life insurance, you must be at least 18.