Maybe you’re just about to turn 30, or maybe your 40s are, well, sooner than you ever thought possible. Whatever the case, if you haven’t bought life insurance, there’s no time like the present. Buying life insurance in your 30s is often one of the most practical, impactful and affordable times to secure coverage. (And, it’s not a coincidence that the average Haven Term customer is in his or her mid-30s.) Here are five smart reasons to do it, followed by some tips for what kind of insurance and coverage you might need.
Trust us, your forty-year-old self will thank you for not putting this off.
#1: You have a family now
Maybe it’s a long-term relationship. Maybe you’re married with a brood of kids. Or maybe it’s something in between. But the point is, there are people whose financial well-being depends partially or maybe even entirely on you. Which means that, unlike in your unattached 20s, you have dependents who could be left in a challenging position by the loss of you and your income. (Not to reduce you to your salary, but you know what we mean.)
In your 30s, you might find yourself buying a house, getting married, or starting a family. If you were to pass away, the proceeds from a life insurance policy can be used by your partner, kids, designated guardians, or even your parents to help pay for the mortgage or rent, funeral expenses, childcare, and the many other day-to-day bills we all have. It’s selfless and alleviates a significant financial burden for your loved ones.
We’ll put it another way: You can consider it a very important first gift to your child. Parents have countless hopes and dreams for their children that, unfortunately, cost money to make happen. Buying a policy now helps ensure that your family has money to continue affording those plans. Knowing that your child is protected, and will have a life insurance policy payout to put toward things like taking dance classes, going to camp, or attending college, even if you were no longer here, is one way to begin leaving a legacy for your child.
#2 You make more money now
In your 20s, you’re likely at a low point in terms of your salary. But once you hit 30, you’ll probably be making a little more money, which would be difficult to replace if something were to happen to you. Losing you could put your family in a precarious financial position. Getting a life insurance policy can help protect them in case the worst should happen.
#3 You might owe some money, too
A mortgage, student loans, car loans, credit card debt … these don’t just disappear when you die. (Some personal debt such as federally-funded student loans or private credit card debt may be forgiven.)
However, private student loans, car loans, and mortgage will often still need to be paid and can be left to your cosigner or spouse to continue paying — without your income to support them. If you have any debt with cosigners, such as student loans, then it’s important to consider buying a life insurance policy to protect their ability to pay off those loans. It’s also important to think about all the other things that your loved ones may be on the hook for if you were to die.
#4 You might save money by getting life insurance now
There are a lot of advantages to being relatively young. You have time to tick things off your bucket list. You probably won’t die any time soon. And obviously, you might be eligible for a lower rate on term life insurance. Why’s that? Because you have plenty of years in front of you (especially if you’re in good health), so your insurer can lower how much you owe per month for the same amount of coverage as someone a decade older. For example, a healthy 30-year-old woman can purchase a 30-year, $500,000 Haven Term policy, issued by MassMutual, for about $34 per month. If she waits until 40 to buy a policy, the starting price for the same amount of coverage would be $53 per month. (And while it’s an annoying truth, the older you get, the more statistically likely you might be to be diagnosed with certain diseases that may make you ineligible for a term life insurance policy — or may cause rates to skyrocket.)
In other words, your life insurance policy might be cheaper than you think, and it might never be cheaper than it is today. (Get a quote and see.)
#5 To avoid medical hurdles in the future
No one has a crystal ball that can tell you what your health will be like six months, one year or five years from now. Therefore, if you know you have a need for coverage, lock in that affordable pricing while you can.
#6: To cover burial expenses
OK, that’s dramatic. But you get our point: You never know what challenges are around the corner, and those challenges could include an unexpected accident or illness. Getting life insurance now helps provide protection in case you find yourself in that situation.
And keep in mind, many family members go into sticker shock when they get quotes from funeral homes for burial expenses. While it might not be pleasant to think about, the costs of a funeral, cremation or burial, and a memorial marker can easily cost upwards of $8,000, according to the National Funeral Directors Association. If you didn’t have life insurance, your spouse or other immediate family members would need to come up with the cash to pay these expenses at the same time they’re grieving your death. Far from ideal.
#7: To protect your business
If you have any business dealings on the side, life insurance is essential. Let’s say you buy and sell real estate for a profit. What would happen if you passed away in the middle of a deal? What if you flip houses for a profit? How would your family handle your project if you passed away during a flip or a major remodeling job?
Your family could face similar struggles if you run a small business that buys and holds inventory, has business-related debt, or has ongoing business expenses to cover. If you buy enough life insurance, on the other hand, you can leave behind enough cash so that your family could deal with your business holdings the way you would have wanted.
#8: To get it over with
Want something simple to check off your to-do list? Apply for life insurance. Thanks to modern technology, buying a policy is easier than ever. It’s not something you need to put off because you think it’ll be a hassle. It isn’t.
Life insurance that's actually simple.Estimate your rate
What kind of life insurance should a 30-year-old buy?
There are two types of life insurance that are commonly purchased: term and permanent. Term life insurance provides a simple, straightforward way to help financially protect your family during the years they need it most – such as until the mortgage is paid off or your kids are in college.
Permanent life insurance comes in a few varieties – the most common being whole and universal life. Unlike term, permanent policies provide coverage for a lifetime and include a cash value component that can grow or decrease over time. These features are why permanent policies can cost anywhere from 5 to 20 times more than a term life policy.
So, which is the right choice for an individual in his or her thirties? That will depend on your budget and what you want from a life insurance policy. For many, though, term life insurance is a good, affordable way to secure coverage.
How much coverage does a 30-something need?
While individual life insurance needs vary, you can get a general sense of your coverage needs by taking a closer look at your income. If you’re earning $75,000 per year and want to replace your income for 5-10 years (a standard recommendation from experts), you’ll need a term policy for $375,000 – $750,000.
Take into consideration the following when choosing a coverage amount:
- Lost income and living expenses, like rent or daily bills
- Debts you leave behind
- Childcare if you are a stay-at-home parent
- Burial, estate taxes, and other final expenses
- College expenses for your children
- Unpaid medical bills or taxes
If you have children, carry substantial debt, own a business, you may need more. The best way to get a personalized coverage recommendation is to input your information into a life insurance needs calculator. By sharing some basic details about your income, your family structure, debts and more, you can find out how much coverage is right for you.
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What’s the best term length for someone in their 30s?
Term life insurance policies are relatively simple to research and buy. Beyond selecting a coverage amount that works, you need to decide how long you want your policy to last.
Fortunately, you have plenty of options available to you, especially in your 30s. You can buy term life insurance coverage for 10, 15, 20, or 30 years depending on your needs. While longer policies tend to cost more each month, they do offer a longer span of coverage that may bring even more peace of mind. For example, a longer term length means insurance coverage could be in place for the duration of your 30-year mortgage or until your partner is near retirement.
Shorter-term policies, on the other hand, offer short bursts of coverage meant for a particular need. For example, a short, 10-year business loan that you wouldn’t want your family to be stuck with.
Choosing a term length does not need to be a confusing task. An online life insurance calculator will take into consideration the ages of your children and debts you have to recommend a length that will adequately protect your family. On average, we find that most Haven Term policyholders purchase a 20-year policy.
Why buying life insurance in your 30s is simpler than you may think
Look, purchasing a life insurance policy may never show up as one of those memorable moments on your Facebook feed or social media timeline, but taking the time to research and choose a policy also won’t pull you away from planning a blowout birthday bash or taking a major “grown-up” vacation. An online application can provide instant rates and coverage options that will last you through the next few decades.
So, apply for a policy, revel in your newfound maturity, then book that trip to Tahiti. You’ve earned it.
It’s not just easier life insurance, it’s an easier life.
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Louis Wilson is a freelance writer whose work has appeared in a wide array of publications, both online and in print. He often writes about travel, sports, popular culture, men’s fashion and grooming, and more. He lives in Austin, Texas, where he has developed an unbridled passion for breakfast tacos, with his wife and two children. This article is sponsored by Haven Life Insurance Agency. Opinions are his own.