When is a good time to buy life insurance?

As you start to make investments in your life such as buying a new car or house, you will want to consider investing in a good life insurance policy. 

Since death is inevitable, often people want to cover their families after they die by buying life insurance before they pass. Ideally, your life insurance should be sufficient to compensate for what you contributed to your household when you were still alive.

Many people make the mistake of passing before they get the chance to buy a policy or buying too little coverage after deciding to move forward with purchasing a policy. To avoid these mistakes when buying life insurance, remember that the goal of life insurance is to replace your financial contribution after you have passed. 

Since your age and wellness affect the cost of life insurance premiums, that plus your household’s financial security are the most important deciding factors on when to buy life insurance.

Who needs life insurance?

Anyone may benefit from getting a life insurance policy, but those who are married or have children can buy it immediately. When your family financially depends on you, life insurance will cover household costs until you die.

Even if you do not have any active money coming in, a life insurance premium would help pay for child or senior care if you were the primary caregiver in your family. 

Finding healthy and secure childcare can be financially challenging and complicated. So life insurance is important in these circumstances, especially if your money was a key contributor to this need.

And, whether you cosigned a loan or credit card with someone else, they could be responsible for the balance, and life insurance will help them with the additional funds they need to pay off the debt.

For those who are single, buying life insurance will help you plan for the possibility of starting a family in the future since life can shift at any moment. However, If you are certain you will not have any children, a life insurance policy can simply be used to pay for your funeral. 

Furthermore, purchasing life insurance when you are younger and happier is a smart way to save money. When you grow older and settle into a large company, the pressure of work can impact your health. Poor health can lead to higher life insurance rates.

Younger People Can Get Better Life Insurance Rates 

When you are younger, the annual premiums for life insurance can be lower. If no one depends on your salary when you’re at a younger age, following life insurance premium rates with an age map is a smart way to figure out when to purchase life insurance.

Of course, if you have children, then you should base the time to buy a policy off of that instead of your age.

Purchasing a policy that covers you for up to 20 to 30 years when you are younger will save you money long-term. When it comes to life insurance quotes, the younger and healthier you are, the cheaper your rates would be.

For instance, a 20- to 25-year-old nonsmoker might end up spending as little as $25 per month on a $500,000 life insurance policy for a 30-year limit. Whereas a 40-year-old might end up spending about $50 per month for the same health status and insurance plan.

The price of life insurance increases by at least half if you double in age, and it will rise by more than half if you struggle with medical problems later in life. 

Aside from the savings associated with buying a policy young, being approved for a policy at a younger age is better because you are less likely to have health problems.

Other Things to Consider When Planning to Buy Life Insurance 

Everyone does not need a life insurance policy in place if they have a large sum of money put aside or other financial cushions to fall back on, but for others, it can be costly to not have one. Not having a life insurance policy is especially expensive for people with dependents.

A retirement account you left behind may be adequate to sustain one or two dependents temporarily, but it may not be sufficient if there was not much money in it or you have more than two dependents.

Having children, parents that depend on you, and a spouse can take a huge financial burden on you while you are alive because they survive on a good chunk of your income. So consider how they will get along once you pass away. 

They may end up struggling financially or losing control of their entire way of living. As someone who probably cares significantly for their loved ones, the last thing you would want to happen is to leave them with no financial security while they grieve your passing.

People in their 20s or early 30s naturally don’t feel the need to purchase a life insurance policy, particularly if they are single with no children. However, When you have dependents or are married, your age is simply a non-factor because there is so much at risk.

Whether money will be needed from you after you die is the most vital determining factor when finding a good time to buy life insurance.

How much life insurance do I need?

When purchasing life insurance, you should plan to buy enough to cover end-of-life expenses (funeral, cremation, burial, and so on), their family’s potential household expenses, and any outstanding debts. 

If you don’t purchase life insurance or don’t have enough insurance, your family may struggle financially and be responsible for your expenses, or they may be unable to continue their lifestyle after you die.

To determine the amount of coverage you need in your life insurance policy, sum up your obligations (debts, bills, etc.) and deduct your savings from that total. This would give you an idea of your family’s potential household spending after you pass away.

The majority of life insurance companies advise their customers to buy six to ten times their average income. 


Though this is an ideal method for determining a fair amount of life insurance coverage, using the loans and household costs as a margin is equally useful.

What type of life insurance should I purchase?

Term life insurance and permanent (or whole) life insurance are the two types of life insurance.

Term Life Insurance

Term life insurance has primary coverage for a set period of time. Depending on the policy, this coverage will extend anywhere from 10 to 30 years.

Since it is the simplest, this is the most affordable form of life insurance. You make arrangements for a set number of years. When the term expires, you will no longer be able to make monthly payments towards the policy since you will need to launch a new one.

Permanent (Whole) Life Insurance

Permanent life insurance covers you for the rest of your life and usually has the option to create cash value.

Permanent life insurance is more costly than term life insurance, but it never expires. This form of policy is expensive, but it also comes with a cash value that grows in value as you pay your premiums. 

The cash bonus can be used to supplement the death benefit received from your relatives when you retire, or it can be withdrawn while you are still alive.

When is a good time to buy life insurance?

A good time to buy life insurance is when you have children or intend to marry. A big mistake that young people make is assuming they do not need life insurance, but if they consider their other life conditions (like health, savings, and dependents), they may consider otherwise.

As a rule of thumb, you should purchase a life insurance policy as soon as you can afford the monthly or annual premium. You pose little risk to an insurer when you are younger and healthier, so they will be willing to offer the lowest prices.

Even if you follow tips to stay healthy so you can live longer or have no dependents or a spouse at the moment, you never know when life will change. Get lower rates now rather than higher premiums later.

Imani Francies writes and researches for the life insurance comparison site, EffortlessInsurance.com. She enjoys helping people find the best life insurance policy and rates that meet their specific needs.