If you put off buying life insurance in your 20s, don’t waste your energy on regret.
While nothing will be as painless on your wallet as purchasing life insurance at 20, most people don’t need it then.
If you waited until your 30s to buy life insurance because you didn’t have a reason to before, you still saved money!
Life insurance doesn’t start jumping up in price until you approach your 40s. Plus, there are ways you can save yourself money no matter what your age is.
Table of Contents:
- Life Insurance in Your 30s
- Pros of Life Insurance at 30
- Best Policies for 30 Year Olds
- Best Companies for 30 Year Olds
- Find the Best for You
What You Should Know About Life Insurance at 30
There is not an enormous difference between buying life insurance in your 20s versus your 30s, though earlier is always better.
Life insurance prices increase roughly 8% a year on average. At the rates (especially for term life insurance) that you’re looking at as a 30-year-old, 8% doesn’t make an enormous difference. However, if you put it off until your late 30s, you will start to notice a difference.
Life insurance rates are based on a handful of things. The big three are your age, your biological sex, and your health.
While there isn’t much you can do about whether you’re a man or a woman, as far as age goes, earlier is better.
Your health also gives you an advantage when you look at life insurance at age 30 because most people’s health starts to decline once you approach middle age.
The life insurance company will also look at your job, your medical records, your hobbies, and your driving records.
Pros to Getting Life Insurance In Your 30s
The older you get, the more expensive it is to get life insurance. Sometimes it’s more difficult as well. You can’t control your health events. You can’t stop aging.
1. Lock in Lower Rates
The first advantage of getting insurance when your young is your age.
The younger you are, the longer between right now and the average lifespan of a man or woman living in this country. The longer that gap of time, the cheaper your rates will be.
2. Fewer Health Issues
The younger you are, the lower the odds of developing health issues. You have fewer years accumulated to develop health issues from environmental factors.
The healthier you are, the lower your rates. That goes for everything from pre-existing conditions to your height and weight ratio.
3. Cheaper to Convert/Renew/Reapply Later in Life
If you are buying a term policy now, it will expire earlier then if you buy it next year.
However, that also means if you find you still need life insurance when this policy expires, it will be much cheaper than if you push it back a year or two.
An 8% premium increase doesn’t mean much when you’re 30. It can mean a huge difference when you’re 60.
Best Life Insurance Policies for 30 Year Olds
The type of life insurance you buy depends on why you’re buying life insurance and your discretionary income.
Term life insurance will cost you less than permanent life insurance. Many times less. But it might not fit your needs right now. On the other hand, if permanent insurance may serve you better, but you can’t afford it right now, that’s a problem too.
Term Life Insurance
Term life insurance lasts for a set number of years, usually between 10 and 30. It’s the simplest and the cheapest form of life insurance. So when it says “30-year term” on your life insurance policy, that means the coverage lasts for 30 years before expiring.
Some term life insurance policies allow you to renew or convert the end of your term. When you’re buying life insurance in your 30’s it’s impossible to know what you will need at the end of your term. Using a company who offers this extra perk allows you to keep your options open for the future.
Because term life insurance only offers a death benefit, it’s about as low-cost as life insurance can get. There are no extra frills in the policy unless you choose to add riders.
A rider is an extra component of the policy. For example, you might look into return of premium rider which would refund most or all of your premiums if you survive your policy.
Permanent Life Insurance
Permanent life insurance lasts for your lifetime. Although some policies can be set to expire at age 105, 115, or 121. Even then, that still exceeds the lifetime of the vast majority of people.
Permanent is a general term denoting the length of the policy. When you go to buy a permanent policy, the actual type might be whole life or a variable universal life insurance policy.
Permanent life insurance policies have additional features like cash value accumulation. The cash value of your policy builds as you pay your premiums. These grow depending on the type of permanent policy you choose. For example, whole life tends to be slower but more stable growth whereas variable universal life swings heavily with the market.
You can use the cash value accumulation as a low-interest loan. The added bonus is that the insurance company doesn’t care why you take out the loan, unlike a bank. They’re holding your death benefit as collateral. If you don’t pay it back, your beneficiary doesn’t get that amount of the death benefit.
Permanent is best for reasons like leaving cash to your heirs, covering any estate costs, and making sure your spouse will be taken care of for life.
Best Life Insurance Companies for 30 Year Olds
We picked our top five favorite life insurance companies that work well for most people. But remember that each company has a different set of underwriting guidelines.
A company that works well for most people may not be ideal for you. That’s nothing to worry about.
We picked these five based on their claims records, customer service, affordability, and financial strength.
For most age groups, Protective offers some of the lowest rates you will find from a financially stable company for lower benefit amounts.
AM Best gives them an A+ for superior financial strength in their latest review.
In your 30s, AIG does exceedingly well at offering competitive rates to high benefit amounts.
They’re almost the counterpart to Protective. AM Best gives them a solid A.
Lincoln is not the lowest price for every category, but their underwriting guidelines are reasonable for most people.
They also are one of the lowest for both high and low benefits, short and long terms.
With an A+ from AM Best, they are our jack-of-all-trades pick.
Sagicor also offers competitive rates for lower benefits and shorter terms. But where we really like them is the affordability of their no-exam policies.
You can get a lower cost policy without the hassle of the life insurance medical exam than you can from many companies requiring the exam.
AM Best rates them at an A- for good financial standing with a stable outlook.
Foresters is our pick for the top company offering whole life.
Their rates are comparable with other whole life companies, but they also provide a 20-pay in many cases. A 20-pay means you only pay premiums for 20 years, then you keep the policy for life.
AM Best gives them an A with a stable outlook.
Finding Life Insurance in Your 30’s
Remember that by deciding ahead of time how much you need and what type of policy best suits your family, you can save yourself both time and money.
You cannot be oversold, and your family won’t be underinsured.