When it comes to choosing life insurance, term life insurance rates by age will vary. This is one of the most important things to consider. The right policy for someone in their 20s is going to be very different from the right policy for someone in their 50s. In this blog post, we will discuss the different types of life insurance policies available and how to choose the right one for you.
Getting Life Insurance in Your 20’s
Your 20s are the best time to buy affordable term life insurance coverage (even though you may not “need it”). Generally, when you’re younger and healthier, you pose less risk to an insurer, which is why you’re offered the most affordable rates.
Let’s dive into some specific examples of term life insurance rates by age. For example, a 25-year-old man in excellent health could purchase a 20-year, $500,000 AIG Term policy for as little as $18.73 a month. If you were to purchase a 20-year term life insurance policy at age 25 with a 1-year-old child, you would have coverage in place to protect those you love in the event of your death — through age 21 for your child — offering financial protection during the years you may need it the most. Life Insurance policies for people in their 20s typically have a lower premium payment, so you are looking at a low monthly rate.
Additionally, for many, your 20s are a time when your health history is probably the best it will ever be. You may not have experienced any illnesses or health concerns that could later make you uninsurable. So the younger you are, the longer your life expectancy, the lower the average life insurance cost may be.
Purchasing Life in Your 30s
Continuing our guide on life insurance rates by age, we enter our 30s. By the time your 30s hit, life insurance becomes more important than ever. Statistically speaking, you’re more likely to be married, own a house, have a few kids, drive a couple cars, and plenty of bills to pay.
With so many financial responsibilities, and good health likely still on your side, your 30s are one of the best times to assess your life insurance needs to get a good life insurance rate. Even if you purchased a small policy in your 20s or get life insurance coverage through your employer, it’s likely time to determine if you need more.
Employer Life Benefits?
First, don’t rely on employer-provided policies alone. Typically, this coverage amount only offers a death benefit of one to two times your annual salary, which is far too little coverage if you have financial dependents.
Many experts suggest buying a policy that’s at least five to 10 times your annual income. The recommendation can go as high as 15 times your income if you have a partner and children and few liquid assets.
Looking at Policies In Your 40s
If you’re uninsured or underinsured, your 40s are the time to adjust your life insurance needs before rates get high. Age matters to insurers, and you want to make sure you find an insurance provider with affordable life insurance options that align with your individual needs.
Perhaps you have group life insurance through work, but worry it’s not enough. Assuming you plan to stay at your job for some time, an individual policy can help supplement what you’re already getting through your employer.
Or, maybe you purchased a term life insurance policy in your 20s with a 20-year term length that’s soon to expire and are realizing you’d like a little more time added on to provide further financial protection. This can happen if a mortgage took longer to pay off, you had your first child, or if you’d like to provide a little more of a financial cushion for your spouse or children.
Getting Coverage in Your 50s
There’s no other way to put it: Buying life insurance in your 50s will cost more. That said, if you have few assets and financial dependents who rely on your income, you shouldn’t bypass coverage.
Research shows that most Americans significantly overestimate how much life insurance will cost, and we’re pretty sure coverage in your 50s would be one of those scenarios. A 20-year, $250,000 Protective Life Term policy would cost a 55-year-old woman in excellent health about $56.64 per month. The price of coverage comes in higher for a man of the same age and health at $76.77 per month.
While not inexpensive, if it’s providing peace of mind and necessary coverage, it’s probably worth it.
Life insurance proceeds in your 50s could help your beneficiaries pay:
- The remainder of a mortgage that took longer to pay off than expected
- Debts or unpaid bills you wouldn’t want your partner to be left with
- Make up for a gap in coverage because of a significant increase in earnings
- Protect a non-working partner who solely relies on your income
- Serve as a legacy or financial cushion for your beneficiaries
- Medical bills or other final expenses
To ensure you get the best rate in your 50s, utilize online life insurance quote comparisons like the one we have to confirm you’re selecting a competitive price. It’s also worthwhile to start the application process and see what amount you are approved for and how much it will cost.
What About In Your 60s?
It’s not too late to buy life insurance once you’re in your 60s. Haven Life sells affordable term policies to individuals ages 18 to 65. The main difference between life insurance in your 60s and everything before then is that you likely won’t be able to buy a policy that has a term length over 20 years.
To keep costs down, and assuming you’re not putting loved ones at financial risk with this choice, it’s a good idea to stick with term lengths of 10 or 15 years.
For example, a 10-year, $250,000 Foresters Term Life policy for a healthy 60-year-old woman will start at $92.69 per month. If you’re considering, for that same woman, a 20-year policy for the maximum coverage duration, you’re looking at about $238.20 per month. You can also compare prices to other insurers to see what the rates might be.
While not inexpensive, that coverage can provide a substantial financial cushion to your spouse or children.
Life insurance proceeds in your 60s could help your beneficiaries pay:
- Debts or unpaid bills you wouldn’t want your partner to be left with
- Protect a non-working partner who solely relies on your income
- Serve as a legacy or financial cushion for your beneficiaries
- Medical bills, funeral expenses or other final expenses
Before choosing a policy, make sure to experiment with a few different scenarios before you settle on one to meet your needs. Slightly changing the term length or coverage amount could result in a significant drop in pricing, which may not be detrimental to your beneficiaries if you’re looking to provide a small financial cushion. Remember, term life insurance rates by age vary. See what yours will be before rates get too high.