March 22, 2021

Do I Need Life Insurance at 30?

Read more about Life Insurance

30 marks the sweet spot where life insurance is still pretty cheap to buy, and it offers more protection than it would in your 20s.

At age 30, you likely have more figured out than you did 5 years ago. And your financial plan should reflect that.

With a life insurance policy, you can be sure that the progress you've made so far will be protected.

Below, find out why 30 is the right age to get a life insurance policy. Plus, learn how much coverage you need at 30.

Why You Should Get Life Insurance at 30

If you're in good health at 30, it's the perfect time to get an affordable life insurance policy.

Below, discover the top reasons why you should get a policy sooner than later.

  1. If someone depends on you…
    Ask yourself: Would someone be hurting financially if you were gone tomorrow? Maybe it's an aging parent, younger sibling, or roommate.

    A life insurance benefit could help pay rent, mortgage, groceries, bills, health insurance, and beyond.

  2. Or…if you once depended on someone else
    If a family member co-signed a loan with you (like private student loans), they'd be legally responsible for that debt. 40% of co-signers report losing money[1] - make sure your loved ones don't.

  3. If you owe any debt…
    Debt doesn't just disappear because you've passed away. If there was no co-signer or joint account holder, your estate is likely responsible for paying it. In other cases, it may fall to your spouse.

    Most of us have debt, so why cover it with life insurance at 30?

    Well, adults in their 30s actually shoulder the biggest piece of total student debt[2] and have over twice as much credit card debt as they had in their 20s.[3]

    If you were to die tomorrow, that debt would be a huge financial burden on your loved ones. A policy benefit could cover the debt so they don't have to.

  4. If you earn more than you did in your 20s…
    You're movin' on up and might be able to make some money moves that weren't within reach at 25.

    At this point, life insurance premiums cost a smaller percentage of your paycheck. The benefit far outweighs the cost.

    Plus, think about all the things your income pays for. If the worst were to happen, replacing that income could be a big strain on your family's quality of life.

  5. If you like a good deal…
    You'll never pay less for a life insurance policy than you would right now.

    Sure, you might start to feel the little aches at 30. But your body and health are still working to your advantage when it comes to life insurance rates.

    Plus, actuaries kick up the rates with each passing year. On top of that, you have a higher chance of developing a condition as you age (which also increases rates). At $9 a month, it's a wise investment.

  6. If you want peace of mind…
    The cost of dying is pretty steep - roughly $12,000, on average.

    Even if you had no debt and no financial dependents, end-of-life expenses still need to get paid.

    Instead, save your estate for a greater purpose (like philanthropy). Then you can rest easy knowing that your life insurance benefit will pick up the tab.

  7. If you don't want to take a medical exam…
    Many people avoid life insurance because they don't want to take a medical exam.

    But at 30, there's a good chance you wouldn't even be required to take one.

    Some online life insurance companies offer healthy adults the chance to get term life coverage instantly - no exam required.

    As you get older, most insurance companies require an exam. This means there's a greater chance they'd find a costly health condition (like high blood pressure.)

Best Type of Life Insurance for a 30-Year-Old

Most 30-year-olds opt for term life insurance because:

  • It's the most affordable
  • It's easier to buy
  • The rates are usually fixed

Term life insurance provides coverage for a specific period of time, which you choose. Depending on what you're buying coverage for, a good term length for most 30-year-olds would be 20 or 30 years.

That likely gives you enough time to pay off any debts you might have. This includes mortgages, medical debt, and student debt.

Of course, you can always opt for a shorter term, too - like 5 or 10 years. This is best if you want protection while you're establishing a business or until you have most of your debts paid off.

How Much Life Insurance Should a 30-Year-Old Have?

First consider your current financial obligations and debt. Then, think about those you'll have in the future.

Next, determine the replacement cost of "services" you provide for your family or loved ones. This includes childcare, cooking meals, or transportation.

Add these expenses up, and subtract your current savings and current policies through your employer. This should give you a general idea of how much coverage you need.

Another approach is to consider how many years you need coverage and multiply your annual income by that number of years.

How and where do I purchase life insurance?
You have two main options:
  • Work with an agent: If you're undecided on life insurance, an independent agent can help you explore your options with different companies. The other type, captive agents, work for one insurance company and can only sell that company's policies.

  • Purchase a policy online: Many insurers let you pick your coverage amount and get a policy quote online. However, you may need to speak to a company agent to finalize the purchase.

Bottom Line

In our 20s, most of us are still finding out footing - financially, professionally, (romantically), and otherwise.

But at 30, there's more riding on your shoulders and, therefore, more at stake. It's the best time to look into getting a life insurance policy, and because of your good health, it'll cost less too.

References

  1. ^ "Poll: 4 in 10 co-signers lose money": CreditCards.com, 2016.
  2. ^ "Student Loan Debt by Age": EducationalData.org, 2020.
  3. ^ "Credit Card Debt by Age": Experian, 2019.

Holly Zorbas is a guardian of content and community at CreditDonkey, a life insurance comparison and reviews website. Write to Holly Zorbas at holly.zorbas@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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How Much Life Insurance Do I Need?

How Much Life Insurance Do I Need

How much life insurance is enough? Learn how to determine how much you need, including the rule of thumb for calculating your coverage.

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