To buy or not to buy life insurance, that is the question on every 30-something’s mind. Right?
Ok, maybe we exaggerated a wee bit. But to be fair, lots of 30-year-olds do consider buying life insurance. Life changes — like buying a home, getting married, starting a family, moving up the career ladder — are major motivators. Others are just proactive and want to lock in a low rate sooner rather than later.
Whether you’re in the first category, the latter, or just plain confused, we got you. Let’s dig into why you may or may not need life insurance in your thirties.
Do You Need Life Insurance at 30?
It depends, as is the answer to a lot of insurance and personal finance questions. Because there’s no one-size-fits-all solution when it comes to buying life insurance coverage, you need to evaluate what your household’s needs are right now and what they may be in the future.
You’re a great candidate for life insurance if one or more of these apply to you:
1. You’re in a Long-Term Relationship
Whether you’re married, in a committed relationship, or prefer not to attach any labels to your relationship status (hey, you do you), you likely have someone who depends on you financially.
If your household depends on your income, a life insurance policy can provide some financial protection for your loved ones. After all, the death benefit — the amount of life insurance coverage purchased — is tax-free and can be used to pay for any expenses deemed necessary (more on that below).
Sure, savings can cover expenses, too. But why dip into a rainy day fund or retirement account when an affordable term life policy can take care of those necessities and more?
2. You Own a Home
Buying a home is a big and expensive milestone. Aside from your mortgage, there are the costs of maintaining your home, additional utilities, and perhaps even landscaping services after neglecting your flower beds for so long that your HOA has noticed…
If you have a mortgage, a life insurance policy can cover the balance of your loan plus any other expenses to keep a roof over your loved ones’ heads.
Homeowners often receive offers in the mail about mortgage protection insurance which certainly is an option. Just understand what you’re getting. Mortgage protection insurance is just what it sounds like: It pays the balance of the loan. And, unlike a term life insurance policy, it typically doesn’t offer a death benefit for your loved ones.
3. You Have Other Debt
Student loans, car loans, and credit cards — oh my!
According to MONEY, 30-something Americans owe between $67,400 to $133,100. Not surprising considering this age range also happens to coincide with child-rearing years and all of the expenses that come along with it.
But even if you don’t have children, you might have some debt from undergrad or graduate school. Or maybe you spent a little more on your wheels than you have cash on hand for.
Whatever the reason for your debt, it doesn’t just go away after you’re gone. Your estate will owe that debt. And if the debt can’t be paid, it could mean selling any assets you may have left to your beneficiaries.
And if you have any cosigners, then that debt now becomes their responsibility. Yup, even those student loans your parents signed off on.
4. You Have Children (Or Are Planning on Having Them)
To piggyback on the point above, you’re likely to incur more debt when children are in your household. You get a bigger home, bigger car, want to fund once-in-a-lifetime vacations to theme parks… you get it. So, it’s especially important to protect your family’s financial future if you’d like them to maintain your current lifestyle.
Even if you’re a stay-at-home parent, you have to take into consideration the amount of work that is keeping your household together. Think childcare, cleaning, cooking, chauffeuring, tutoring, and any other thing your children take for granted now but will thank you for it in about 20 years. Who would take care of all that if you were gone? Take all of these things into account as you try to calculate just how much life insurance you need.
Women, if you are pregnant or a new mother, you don’t need to wait to get a policy either. Plan ahead and lock in a low monthly rate now while you’re younger and in great health. You can get a term life policy online without a medical exam, so you don’t need to worry about abnormal lab results from pregnancy hormones impacting how much you’ll pay for coverage.
5. You Want a Good Deal
If you’re into great deals, then listen up. Life insurance in your 30s can be super affordable.
In life insurance underwriting (the process that determines whether you’re eligible for coverage and if eligible, at what cost), your age is a major factor. Generally speaking, the younger and healthier you are, the less you’ll pay in life insurance premium.
Buying life insurance in your 30s is a steal, especially if you’re in the market for a term life policy. You can lock in a low rate for the next decade or two when you and your loved ones are most vulnerable. Meaning, relatively little savings and likely a good amount of debt.
What’s the Best Life Insurance For a 30-Year-Old?
While we can’t call it the best, a simple and affordable option is level term life insurance. Pick a term, coverage amount, and your monthly payment stays the same throughout the duration of your term.
For example, if you lock in a 20-year term life policy with $500,000 in coverage for $24 per month, you’ll pay that amount during that entire 20-year term. And should you pass away and your beneficiaries receive the death benefit, they’ll get that $500,000 tax-free even if the claim is filed and approved on day 100 or day 7,000.
However, there are many other life insurance products out there. Another popular choice is whole life insurance which you can keep for life. These can be more complicated as they can build up a cash value and can get quite expensive. Just look at the difference between the monthly premium of a term life policy vs a whole life policy.
Life Insurance Quotes for Males in Their 30s
|Age||Term Life*||Whole Life|
Sources: PolicyGenius & Bestow
Life Insurance Quotes for Females in Their 30s
|Age||Term Life*||Whole Life|
Sources: PolicyGenius & Bestow
As you can see, buying a term life policy in your 30s is affordable and customizable. Maybe $500k isn’t the right amount for your needs. That’s fine, just buy more or less. It’s super easy to get, too. You can get quotes and buy coverage online without a medical exam in as little as 5 minutes. You can even do it on your phone.
So, if none of these apply to you, maybe now isn’t the right time. For everyone else…
Being responsible isn’t always fun but it is rewarding. And hey, if you knock out this task now, you can rest easy for the next decade or more.
*Term life insurance underwritten without a medical exam with a 20-year term and $1 Million in coverage. Quotes are based on a healthy 5’9’ male living in Texas weighing 160 lbs, and a healthy 5’4’ female living in Texas weighing 130 lbs.