Life Insurance in Your 30s
Life insurance is an important purchase you can make to help ensure the people you love have what they need financially, even if something were to happen to you. If you were to die, who would pay for your child’s college tuition or your mortgage? While a life insurance death benefit can be used however your beneficiaries wish, these are a couple of common uses.
Waiting until later in life to get life insurance could make getting an affordable policy more difficult. If you develop a serious medical condition, you may not be able to get the best rates or qualify for a life insurance policy at all.
Buying a policy in your 30s while you’re still young may help ensure your loved ones will be supported financially when they need it most.
9 Things You Need to Know When Buying Life Insurance in Your 30s
One of the best times to buy affordable life insurance is when you are still young and healthy. When you’re in your 30s, life insurance may be even less expensive than you think.
In LIMRA’s 2015 Insurance Barometer study, surveyors found that more than 80% of participants overestimated the cost of an average 20-year, $250,000 term life insurance policy for a healthy 30-year-old.1
There are several different types of life insurance policies on the market, but they generally fall into the category of either term life insurance or permanent life insurance.
Term life insurance offers coverage for a predetermined period of time and expires at the end of your “term.” If you pass away during this term and your coverage is active, your beneficiaries will receive your policy payout.
Permanent life insurance lasts your entire life, as long as you have paid your premiums in full and on time. A permanent life insurance policy can also accumulate tax-deferred cash value over time.
Whether you are dealing with a licensed life insurance agent or a broker, be sure to check their credentials and the financial standing of the companies they represent before agreeing to purchase a policy.
Adults in their 30s often have started a family. If you have a spouse or children, you may need more coverage to help provide for them until they are able to support themselves financially.
If you have a partner or spouse, you may want to consider taking out a policy on both you and your partner or spouse. For example, if you work and your spouse stays at home with the children, the cost of alternate childcare would be a major expense if your spouse passed away. You should consider your unique financial contributions before settling on a total coverage amount.
When filing a life insurance application, honesty is the best policy. If you hide important health information, the insurance company may decide to reject a claim made by your beneficiaries, so be extra careful when filling out the application.
Life insurance companies will often offer a “free-look” period for up to 30 days after you purchase a life insurance policy. Use this time to thoroughly review the details of your life insurance policy and ensure it meets all of your needs.
Every policy has its own rules about what will happen if you stop paying the policy premiums. Generally, if you stop paying the premiums for whatever reason, your policy will lapse and you will lose coverage. You should ask your insurance company about your policy’s rules before the coverage begins.
If you have a term life insurance policy, you should find out what options your policy offers for renewing the policy after the end of the term. Sometimes companies will offer you the chance to renew your policy for a higher premium when the term ends, if you still need coverage.
Whichever type of life insurance policy you decide to buy, remember that it is designed to help protect the financial future of your loved ones. As you enter your 30s, family and financial responsibilities often become top priorities, making it the ideal time to buy life insurance for many people.