Having life insurance can mean the difference between your family staying financially secure and going into debt in the event of your death.

Knowing when you should get life insurance can provide stability your family needs if you die unexpectedly, removing the weight of financial uncertainty.

when should you get life insurance

When should you get life insurance, and what kind should you buy? Let’s explore this topic in-depth.

When Should You Get Life Insurance?

While you might feel like you don’t need life insurance, certain life events increase the odds that a life insurance policy could benefit your family.

The answer to when should you buy life insurance, doesn’t always depend on your age.

Some people think that they don't need life insurance until their 50s, when they should get it in their 20s or 30s.

Your need for life insurance depends more on life events than your age.

Once you have people in your life who rely on your income, you need life insurance to protect them.

Certain life events change how you distribute and use your income, which means you need to ensure that your family still has income if you are no longer there to provide it.

Consider purchasing life insurance if you have or plan to go through these life events.

When You Are Getting Married

For many people, marriage means sharing finances and expenses. If you can’t afford to live in your current situation with only one income, you need life insurance.

Life insurance supports your spouse in the event of your death, whether you purchase it at 25 or 45, and reduces the uncertainty associated with covering living expenses after losing one.

When You Have a Baby

You might consider buying life insurance when you have a baby, especially if your spouse is a stay-at-home parent.

For example, if your spouse goes on maternity leave, your income supports your family.

Life insurance ensures that your rent or mortgage gets paid, and your partner has enough money to care for your child.

If you have more children in the future, you might consider increasing your coverage to accommodate their expenses.

When You Get a Divorce

If you don’t have children, you probably don’t need life insurance when you get a divorce.

However, life insurance can protect your children, even if you don’t want your spouse to receive your death benefit.

If you have a revocable beneficiary, you can remove your ex-spouse from your life insurance policy and designate a new beneficiary.

On the other hand, some policies have irrevocable beneficiaries, meaning that whomever you name as your beneficiary stays until your policy matures.

In a divorce, many children have one parent who financially supports them or supports them more than the other.

Life insurance can help guarantee that your children continue to have financial stability if you die unexpectedly.

When You Send Your Kids to College

Life insurance can prove essential if you die while your kids are in college. It can offer a better option than a 529 plan, which many parents choose to support their child’s education.

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What Is the Best Age to Get Life Insurance?

While life events often play a larger role in when you purchase life insurance, you should also consider your age before making your decision.

Your circumstances may affect whether you need coverage, but when should you have life insurance based on your age?

Life insurance companies calculate your premiums based in part on your age. If you wait to purchase life insurance until you reach age 70 or 75, you'll pay higher rates, as you pose a higher risk for insurance companies.

The earlier you buy life insurance, especially if you have no health problems, the cheaper your policy will be.

However, if you purchase a life insurance policy in your 30s, you’ll pay about half what you would after age 40.

Before you buy a policy it’s best to understand what will need to be covered.  It’s best to buy your policy in your 20’s because you can always add beneficiaries at a later date with your price locked in.

What Type of Life Insurance Should You Buy?

Life insurance isn't one size fits all. Your policy should suit your needs, and finding a policy that achieves that requires research.

Do you need life insurance for the next few decades? Or do you want coverage for the rest of your life?

Most people opt for one of two types of life insurance:

  • Term life insurance: Term life insurance covers you for a designated period—usually anywhere from 10 to 30 years, depending on your policy. Once it expires, you no longer have this coverage, and most people purchase it in case of their untimely death.
  • Whole life insurance: Whole life insurance often costs more than term life insurance, but it covers you indefinitely. It also gives you the option to take cash out of the policy if needed.

What's the price difference between whole and term life policies?

If you purchase a $500,000 term life insurance policy as a 30-year-old male, you may pay around $230 each year for a 20-year term life policy.

Compare that to over $4,200 per year for a $500,000 whole life policy for the same person.  In my experience, the best option for all most 98% of people will be term life insurance.

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What to Look for When Buying Life Insurance?

You should also consider how much coverage you’ll need for future expenses.

For example, some people choose to get burial insurance, which offers less coverage but enough to pay for funeral expenses.

what’s the best time to get life insurance

Others have more extensive end-of-life costs.  Before you purchase life insurance, consider the following:

Debt

Your mortgage, car payments, student loans, credit cards, and more fall on your family after your death.

Ensure your life insurance policy offers enough coverage, so they don’t have to pay your debts out of pocket.

Replaced income

If you have dependents, like a child or spouse, your life insurance should cover their living expenses after your death.

Funeral costs

Life insurance should cover burial expenses, memorial services, a coffin or urn, and other costs related to your funeral wishes.

Family expenses

If you want your death benefit to go toward your children’s education, daycare, or similar fees, consider that when choosing your policy.

Consider your age, health, coverage needs, and how much of a payout your family will need if they lose your income.

Taking Action

Purchasing life insurance is a significant milestone in anyone’s life, and you should select your policy carefully.

You must weigh all the factors, from age to how many dependents you have before deciding on a policy.

Always do your research before you buy, so you know which one will benefit your family the most.
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Sa El

About the author

Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry.  He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also an Official Member of the Forbes Finance Council, a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.


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