When Should You Get Life Insurance?

The best time to get life insurance is when you're young and healthy, typically in your 20s or 30s. Premiums are lowest at this stage, and securing a policy early can lock in affordable rates for years to come.

That said, the right time to buy life insurance depends on your personal and financial circumstances. Major life events like getting married, having a child, buying a home or taking on significant debt often signal the need for coverage.

Understanding how your age, health and goals affect life insurance options can help you make a confident, well-timed decision. The earlier you act, the more you'll save and the more secure your loved ones will be.

Certain life events may indicate the best time to buy life insurance to ensure financial security for your dependents. Understanding these events can guide your decision to start life insurance coverage.

Understanding when to purchase life insurance relative to specific life events helps ensure you're adequately prepared. Life insurance addresses immediate financial concerns and builds a foundation of support for the years to come.

When determining the best age to get life insurance, take into consideration various factors such as financial responsibilities, health, family needs and long-term goals.

Getting life insurance in your 20s and 30s might seem premature, but it can be a strategic financial move. Here's a look at the pros and cons of purchasing coverage at this age:

Your 40s and 50s are often a time of peak financial responsibility, making it an ideal period for many people to purchase life insurance coverage. Here's a look at the pros and cons:

Purchasing life insurance over the age of 60 requires careful consideration of your unique needs and goals. Here's a look at the pros and cons:

The mantra "the earlier, the better" applies to buying life insurance. There are several key advantages that come with getting life insurance at a younger age, including:

Getting life insurance early not only capitalizes on lower rates and better terms but also solidifies a foundation for future financial planning. For many, life insurance is an essential part of managing life's uncertainties, making the best time to get life insurance sooner rather than later.

The impact of waiting to buy life insurance becomes evident when examining the cost of premiums. Here's a breakdown to illustrate:

Scenario 1:

A 25-year-old non-smoker male buys a 20-year term policy with a $500,000 death benefit; he's charged $28 monthly for coverage. In this case, the total cost paid over the 20-year term of the policy is $6,720.

Scenario 2:

The same person waits until they're 35 to buy a similar policy. Given their age, the policy now costs $44 per month, leading to a total cost of $10,560 over 20 years.

While the person who bought insurance at 35 paid $3,840 more for the same coverage amount and term length, this comparison isn't entirely fair. Purchasing insurance at 35 covers you during a higher-risk age range (35 to 55), compared to being covered between 25 and 45.

But the earlier buyer still saves on total premium payments and can find cheap life insurance, offering a financial advantage over time.

Securing life insurance at a young age helps mitigate the risk of developing health conditions that could inflate policy costs or render you uninsurable. Insurance companies base premiums on risk factors like your age, health status and lifestyle habits.

Young, healthy individuals typically enjoy lower premiums, but the onset of health issues like heart disease, cancer or diabetes later in life can dramatically increase premiums. For instance, a 25-year-old non-smoker might initially secure a 20-year term policy with a $500,000 death benefit at a rate of $28 per month.

Suppose this person is diagnosed with diabetes at 40. If they were to seek a new policy, they might face a premium increase due to their heightened risk, potentially even double the original rate or more.

This potential escalation shows why the best age to get life insurance is typically during your younger years. Investing in life insurance while young and healthy effectively "locks in" your insurability, ensuring your coverage and rates won't be adversely affected by subsequent health issues.

Life insurance comes in two main forms: term and permanent, each catering to different life needs.

Term life insurance

This insurance provides coverage for a specified term (like 20 or 30 years). It's suitable for people seeking financial protection for a particular period, such as until children are grown and financially independent or a mortgage is paid off.

Here's when it makes the most sense to buy term life insurance:

• Financial Protection for Young Families: Term insurance can provide coverage until children are grown and financially independent, fitting well for families with limited financial resources.
• Mortgage Protection: If you want coverage that lasts until your mortgage is paid off, term insurance can be an good choice.
• Temporary Financial Obligations: For those with financial commitments that have an end date, such as a business loan or educational expenses for children, term insurance offers the necessary financial protection for that specific period.

Permanent life insurance

Permanent life insurance offers lifelong coverage and a cash value component that grows over time. Though it's more expensive, it fits the needs of people who may want to use it for things like estate planning or leaving a legacy.

Here's when it makes the most sense to buy permanent life insurance:

• Estate Planning: Individuals looking to ensure that estate taxes are covered or who wish to leave a large inheritance may find permanent insurance suitable.
• Long-Term Financial Security: For those desiring a financial safety net that lasts a lifetime, permanent insurance offers continuous protection.
• Investment Component: The cash value growth in permanent insurance can be an investment opportunity for those looking to build wealth over time.
• Leaving a Legacy: If you have philanthropic goals or want to leave a financial legacy for future generations, permanent insurance can be a strategic choice.

The best time to get life insurance is when you're young and healthy, as premiums are lower and policies are easier to obtain. Major life events such as getting married, having children, buying a home or taking on debt are key indicators that life insurance should be considered.

Even if you're single, a small policy can help cover funeral expenses and debts. Life insurance provides financial protection for your loved ones, ensuring they are supported in your absence.

Below are commonly asked questions to help you better understand life insurance and decide when is the right time for you to get a policy.

Why Trust MoneyGeek? We analyzed 1,488 life insurance quotes alongside customer satisfaction, financial stability reports, product offerings and more to determine the best term life insurance companies.

MoneyGeek created a scoring system to compare life insurance companies across five categories and ranked them based on their scores. We chose to review these companies based on their broad national coverage and ability to provide an online quote.

MoneyGeek's Scoring System

In our scoring system, companies can earn up to five points in each of five categories. We then use these category scores to calculate an overall MoneyGeek score out of 100.

We applied the following weightings to score insurers:

• Affordability: 30%
• Financial Stability: 25%
• Buying Process: 20%
• Customer Satisfaction: 15%
• Product Diversity: 10%

Each company's score incorporates:

• Cost data obtained through online quotes
• Financial strength ratings from AM Best and number of years in business
• Customer satisfaction data from the National Association of Insurance Commissioners (NAIC) customer complaint index (we reviewed annual complaint data from 2020 to 2022, the most recent year available)
• Availability of tools to aid in the buying process, such as online product materials and multiple payment options
• Diversity of life insurance products offered

Sample Customer Profile

MoneyGeek used a standard profile to obtain life insurance quotes:

• 40-year-old male
• Non-smoker
• 5 feet 11 inches tall and 175 pounds
• Excellent health rating

Premiums are based on the standard profile unless otherwise noted.

We modified the profile by age, gender, height, weight, tobacco use, health rating and geographic location to collect a variety of quotes and determine the best life insurance company for several types of customers. We collected quotes for term life insurance with varying term lengths and coverage amounts as well.

We identified trends in the data set and used those patterns to calculate projections and extend the data beyond what was originally collected.