After brokering high-risk life insurance for as long as we have, you learn a thing or two about how to best structure your life insurance.
We often work with clients who have trouble purchasing life insurance due to health or lifestyle factors, but by that time, it’s too late.
What is a good age to get life insurance? A good age to get life insurance is age 25. By locking in a 30-year, 35-year, or 40-year term life insurance policy when your young and healthy, you guarantee your insurability and an affordable rate throughout most of your working career to replace your income.
The sad thing is that people often don’t realize how affordable life insurance truly is when they are young.
That’s why we recommend you begin by comparing rates with all of the top-rated life insurance companies.
You can do this easily below using our free rate engine tool to display rates with over 50 of the most reputable life insurance companies in the country.
Go ahead an request a quote on our website to see how inexpensive a $1 million death benefit is.
It may surprise you how cheap your rates may ultimately be.
Additionally, if you are newer to life insurance, you may want to begin your journey with a tad bit of life insurance 101.
The link in the sentence above can give you a full scope overview of life insurance works and explain things in more detail for you.
However, if that isn’t what you are here for, then we need to dive into this post.
Here is what you can expect to learn about when the best to purchase life insurance may be:
Feel free to use any of the links directly below to skip to a particular section of this post.
When Is The Best Time to Purchase Life Insurance
Many people consider purchasing life insurance after a life-changing event.
Now some of these events can be good; for example, a new homeowner looking for mortgage protection life insurance.
However, sometimes these triggers can be bad, such as contracting a serious medical condition.
The truth is we all get older eventually will experience illness one way or the other.
You don’t want to get life insurance with a pre-existing condition and potentially pay higher premiums or sacrifice valuable death benefits that your family relies on.
You want to lock in as much life insurance as you can when you are young and healthy because even if you’re in superman-level health, rates will go up every year as you get older.
Why 25 is a Good Age to Get Life Insurance
Age 25 is a good age to get life insurance because you can purchase one policy that will cover all of your foreseeable term life insurance needs for your entire working career.
Life insurance companies will insure high multiples of your current income in your youth, sometimes up to 30 times your salary!
At those multiples, it is easy to qualify for a $1 million death benefit or more.
Locking in $1 million of life insurance is one of the best financial decisions you can make in your twenties because it’s convenient and affordable.
No one likes having to do life insurance medical exams.
By purchasing a policy that you can grow with not only are you locking in a great rate, but you only have to go through underwriting once.
If you are thinking that you don’t need life insurance at 25 years old, let me tell you one thing.
The rest of this post can explain why in more depth.
Life Insurance With Living Benefits Is Imperative At Young Ages
Even if you don’t need the $1 million dollars right away, you likely will soon once you purchase a home or start a family.
They both offer great living benefits and affordable rates.
In fact, the link below discussing living benefits will take you to our post specifically discussing Ameritas Life Insurance Company living benefits and how beneficial they can be for you and our family.
If you purchase a policy with living benefits for critical illness and chronic illness, that will give you additional financial protections for hard-hitting medical conditions.
Unfortunately, most 25-year olds are not thinking about life insurance during that period in their life.
However, if you have the forethought to plan ahead, purchasing a life insurance policy at age 25 may be one of the most prudent financial decisions you make.
The best life insurance companies are increasingly creating products to reward the person who has the foresight to plan ahead.
AIG Life Insurance has offered a 35-year term policy for a long time, which will cover a 25-year old until age 60.
|35-year Term Life Insurance|
|Life Insurance Company||Death Benefits||Rate*|
*This rate is based on a male age 25 preferred best non-tobacco
Banner Life Insurance Company recently has gone further and extended their maximum term length to a 40-year term life insurance option, which will cover a 25-year old until age 65!
What’s even better is that you have no obligation to keep your term policy and can cancel at any time if you become financially independent and no longer need the life insurance.
The life insurance company, on the other hand, is contractually obligated to cover you as long as you pay your premiums on time.
With most term life insurance contracts, your premiums will remain level throughout the duration of the policy and cannot be increased by the insurance company on you as an individual.
Once your level term is up, that great rate that you locked in can be increased.
However, there is little known option built into most life insurance contracts that allow you to extend that great health class rating even further called a term conversion option.
A term conversion allows you to exchange your term policy with a permanent life insurance policy at the same health rating that you are approved at while you purchased your term.
You do not need to requalify for coverage and cannot be turned down for this benefit no matter how your health has changed if you’re still within your contractual conversion period.
If you do need to extend your coverage past your term duration, a term conversion is often a convenient and affordable option to maintain some coverage into your retirement years.
Both Banner and AIG have term conversion options built-in to their term life insurance policies.
What Life Insurance Should I Buy if I am Over Age 25?
As we said before, death is usually the furthest thing from someone’s mind at age 25, but it is never too late to start looking at life insurance.
Pro Tip: Term life insurance is often used as an income replacement tool, and you want your term to expire when you no longer need income replacement (usual retirement).
The key takeaway here is you want to lock in term life insurance for as much of your working career as you can to hedge against the risk of disease and age increasing your rates.
In a perfect world, we’d all have multi-million-dollar policies until age 121, but that is not always realistic.
At the very least, you want your term life insurance to cover your children and spouse until they are financially independent of your income when you die.
You can purchase shorter terms, such as a 20-year, 15-year, or even a 10-year term as long as it covers you until you save enough money for financial independence.
Prudential Life Insurance has a product that takes all the guesswork off your plate by covering you to age 65 regardless of how old you are.
Age 65 is a common age for retirement and when people typically no longer need income replacement any more.
A Good Age to Get Life Insurance Case Study
I insured a 26-year old female for $500,000 death benefit until age 65 with an A-rated life insurance company for less than $500 a year.
That same client is engaged to get married now 4 years later to her fiance who has no life insurance currently.
He has experienced some minor health issues since their 20s that likely will disqualify them him from preferred health discounts.
As a result, he will need to pay and increased cost since he waited and his health declined slightly from 4-years ago for the same amount of life insurance.
Final Thoughts on What Ages Are Best To Purchase Life Insurance
While there is no “rule of thumb” on what is a good age to get life insurance, the younger and healthier you are, the better.
Locking in a great rate preserves while you’re young allows you to purchase higher death benefit amounts that fit comfortably within your monthly budget.
You do not have to worry about your health declining and raising your life insurance rates, or worse, resulting in you becoming uninsurable.
If your financial circumstances change, you have no obligation to keep the term policy and can cancel it at any time.
If you need to extend your coverage, you can convert all or a portion of your life insurance policy into a permanent life insurance policy, such as whole life or universal life.
Request a quote on our website today to compare the rates of over 25 top-rated life insurance companies to see just how affordable locking in a $1 million death benefit is.