Life insurance is one of those things people put off thinking about as long as possible. This makes sense, as no one really wants to dwell on their own mortality. The problem is that you never know what’s going to happen. Also, the sooner you buy life insurance, the cheaper it will be.
When determining at what age a person should buy life insurance, we need to differentiate between term life insurance and whole life insurance. Whole life insurance is a type of permanent life insurance. You continue paying it throughout your life and it grows as time goes one.
Term life insurance, on the other hand, is in place for a specific period of time. Usually, that is around twenty to thirty years. It is much cheaper than whole life insurance but you do not get anything out of it once the term is up.
With this in mind, let’s take a look at who may need these kinds of life insurance at specific stages of life.
College Students
Most college students do not consider getting life insurance and, in fairness, they do not have to. They are young and healthy and have no dependents. They’re also not making enough money to foot any extra bills, if they’re making money at all.
However, there are reasons to get term life insurance at college age. Students who have significant student debt from private lenders may get life insurance for the sake of their parents or whoever will get left with the bill if they die. Students who plan on starting a family soon after leaving college may also be tempted by the low premiums they would get at a young age.
One issue is that a twenty-year term life insurance policy could well run out before their own kids are independent. At the same time, whole life insurance is expensive and not practical for most college students.
Your Twenties: Early Career Days
For people early in their careers, term life insurance is definitely recommended. You are now earning money and in a position to start a life of independence. The likelihood that you will soon have dependents is fairly high. Starting a life insurance policy now will get you cheap premiums, saving you money in the long run.
If you already have dependents, life insurance at this age is a no-brainer. People now rely on your income. Term life insurance will cover them if something happens to you. It may be worthwhile to start considering whole life insurance. While it is more expensive, it ensures your family are not left in the lurch twenty years from now. Your payout will also grow considerably in that time.
Your Thirties: Planning Ahead
If you have already entered your thirties, life insurance is highly recommended even if you have no dependents. The younger you get your policy, the better. You may still opt for term life insurance, but whole life insurance is a good option at this age. Whole life insurance will come at a much lower cost than if you got it twenty years from now. You can also pre-empt the possibility of health conditions increasing the cost of your insurance.
There are also health conditions that may get in the way of you securing a life insurance policy at all. Waiting until you’re forty or fifty could leave you in a position in which your family is not covered when worst comes to worst.
Your Forties and Beyond
While you should get life insurance at as young an age as possible, this doesn’t mean the ship has sailed if you’ve passed forty. Yes, life insurance will cost more (and whole life insurance will pay out less). But it is still important that your family have a cushion to land on.
You will need to bite the bullet and pay the higher premiums. You will appreciate it if you fall ill and want the assurance that your family will not go wanting if you die.
All Alone?
But what if you have no dependents? Not everyone wants to start a family of their own and some people are happy to be single their whole lives. If you are such a person, do you need life insurance at all?
You never know whether you might meet someone who changes your mind about being alone. There may not be an urgent reason for you to get life insurance, but it is worth having just in case. That said, you know yourself better than anyone else does. If you’re not concerned about potential future dependents, the money may be put to better use in your retirement fund.
There is no ‘right’ age to get life insurance, but the younger you do so the better. Ultimately, no matter what your age, starting a life insurance policy is important so as to give you and your family peace of mind.
