What’s the Right Age for Life Insurance?

When do you need life insurance? When is the best time to purchase life insurance? Today I’m going to be looking at the different ages and if you should be purchasing life insurance at that age.

I recently purchased my first life insurance policy and the experience encouraged me to learn more about life insurance in general – including when most people should apply for it.

There are things to consider about buying life insurance at every stage of life, but when is the right time?

The vast majority of people interested in life insurance obtain their policies between the ages of 20 and 40, and there are different positive aspects about life insurance depending on your situation.

Why should you apply for life Insurance? 

Life insurance is an amazing tool that can provide protection for your family in case of the worst situation where you would pass away.  

Life insurance is one of those things most of us ignore for far too long for various reasons, from not having the extra money in the budget to not wanting to deal with the frustrating process of applying. It’s all too easy to push off applying for life insurance when you know you have to answer a ton of questions and have a medical exam.  

Luckily more and more companies have realized that people are avoiding life insurance because the traditional process can be so complicated and frustrating.  

Getting life insurance without an exam can take less than 10 minutes, which removes a lot of the barriers to getting a life insurance policy.

Life Insurance At Ages 20-29

Most people think of age 20 as far too young to start thinking about life insurance or anything else longer-term than dinner that night. I know personally I lived my life in 6 month increments for almost my entire 20s and life insurance was not on my radar at all.

However, a life insurance policy can often be a prudent investment for a typical person of this age if there are children involved or there are no assets to cover your passing.

Many people in their early 20s have amassed considerable debt due to student loans, credit cards and other expensive lifestyle choices. While their debts will not manage to outlive them, the people they love will be left to bear the consequences of covering funeral expenses which can cost $10,000. A life insurance policy can provide funds for settling debts like a mortgage as well as final expenses to ease the strain on a family.

Another benefit of getting a life insurance policy at this age is the very, very low rates you will be given due to your age.

Younger people are eligible for much better rates on life insurance policies than those who wait to purchase a policy at an older age. This will save thousands of dollars over the life of the policy due to lower premiums even though you are starting sooner.

If you start a term policy in your 20s you will likely want to get a longer period of coverage to cover the next 2-3 decades where you will be getting out of debt and building wealth.

Life Insurance At Ages 30-39

By the time you hit your 30s you are likely already considering life insurance. By this time frame most people have children or spouses. There is more responsibility to provide for the people in your life.

Most 30 year olds are still in fairly good health and have much of their lives before them. You likely will outlive a term policy you get at this age. Nevertheless, this is an important age range to consider life insurance.

Because the majority of people at this age are married or have children, holding a policy that can provide for their protection in case of the unexpected becomes extremely important.

A life insurance policy can provide for immediate expenses, pay off your mortgage, and provide a monthly income to replaced yours. This is extremely important if your family loses both you and your income.

Although a 30 year old will have to pay a higher premium than a younger applicant, the rates are still competitive provided your health remains good.

Life Insurance At Ages 40+

By this age, if you haven’t gotten married or had children, you probably won’t but you may or may not have life insurance.

If there is no one officially depending on your salary and you’ve built up substantial financial assets, then you likely don’t need life insurance.

If you do have a family or any dependents then you need to immediately look into life insurance if it fits your situation. If you have achieved a high income then you need to make sure that income will be adequately covered if you are no longer here.

The options for life insurance policies are much more limited and more expensive in the age range, especially if you develop health concerns as most people do as they age.

Other situations where you might want to consider life insurance:

  • A life insurance policy can protect a business partner in case of your untimely death from years of stress-free living.
  • A life insurance policy can provide an inheritance for anyone you wish to bless regardless of if it’s needed.

There may be a number of reasons why you want to purchase life insurance after the age of 40.

When should you get life insurance?

Life insurance is not right for everyone but it is important to consider several factors:

  • Does someone depend on your income?
  • Do you have assets that provide financial stability?
  • Do you have liabilities that will need to be covered?
  • If you are no longer here, will you want the money to help someone make it through?

No one can answer those questions for you but you will have to look at your own situation and decide if life insurance is right for you in your current situation.

Life is extremely unpredictable, and so it is best to carry a good policy as soon as you’re able. An outstanding policy will provide benefits and security for you and those you love throughout your life and even afterward. The right age to seek out a life insurance policy is debatable, but the fact that it is more expensive the longer you wait is not.

How much life insurance do I need? 

Life insurance needs vary from person to person and you need to take into account personal information about your specific situation. 

For example if you are healthy, young, single and have no dependents then you might not need life insurance.  However, if you have a kid or four then you definitely need to get life insurance to make sure your children are taken care of if the worst happens. 

In my personal opinion at the bare minimum life insurance should cover having your home mortgage paid off and multiple times your annual salary.  Many experts recommend 10-12 times your annual salary for life insurance.  

When did I get life insurance?

Personally I waited far too long to get life insurance and even went two years after my daughter was born without it. During the coronavirus pandemic of 2020, I finally realized I needed a life insurance policy outside of work for several reasons:

  1. I knew that while I was covered at work, if I got laid off that policy wouldn’t go with me.
  2. I have a child and if something happens to me I need to know she is taken care of financially.
  3. I have a mortgage and if something happens to me and my income disappears, I want my house to be paid off for my husband.
  4. I want to make sure my family has the resources they need to survive if I’m not able to be here for them. 

Those are the reasons I decided to get a life insurance policy at this time. I was able to get an affordable rate policy while in my 30s and it will cover me during my 30s, 40s, and into my 50s. I’m happy with that solution and sleep better at night after getting my own life insurance policy.

Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.

Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.

Her favorite investment platform is M1 Finance, where she built a custom portfolio for free with no fees. She shares her portfolio growth and savings progress every month on YouTube.