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How to Approach Life Insurance in Your 20s, 30s, and 40s

By Jacqui Kenyon Oct 6, 2020

In this article

Thinking About Life Insurance in Your 20s

Applying for Life Insurance in Your 30s

Checking Out Life Insurance in Your 40s

Parenthood can involve a shocking amount of Googling—how long should you let a baby cry? When should your baby transition to one nap a day? How much screen time should a toddler get? 

One of the most important things to look into when you’re starting a family is life insurance. Of course, researching life insurance puts us in the often uncomfortable position of having to consider our own deaths. It can be a hard thing to wrap our heads around, especially when we’re young and healthy.

But age and health are the deciding factors for how much you’ll pay for life insurance coverage, so it’s worth thinking about life insurance now, regardless of how old you are.

Here’s a breakdown of what to expect about getting life insurance in your 20s, 30s and 40s.

Thinking About Life Insurance in Your 20s

The main purpose of buying a term life insurance policy is to replace the income you’re currently earning if something were to happen to you. Ask yourself: Who, other than myself, depends on the money I earn?

If you have children, life insurance is a must. The everyday expenses of raising kids—housing, food, entertainment, clothing, activities—get expensive fast, never mind the cost of college. You probably want to ensure that if you were to pass away, your family would be able to cover all of those expenses with ease. This is especially important if you have a spouse who’s a stay-at-home parent.

Your 20s can be a great time to purchase life insurance, since age and health are the main factors that determine what you’ll pay. When you’re young, you’re less likely to have the kinds of health conditions that could make life insurance more expensive (or even make you uninsurable). Generally speaking, life insurance gets pricier the older you are, so it can be useful to lock in lower rates while you’re still young.

Kathryn Casna, a licensed insurance agent at TermLife2Go, says that your 20s can be the right time to buy life insurance for many people, since they tend to be starting families and taking on mortgages but have little in savings while they’re earning low, early career wages.

“Carefully review all the expenses your loved ones would have if you passed away unexpectedly, and consider building in extra coverage for potential future needs, since you'll likely be able to snag low premiums now,” she says. 

For example, for the policies offered through Fabric, a 25-year-old woman living in Michigan who doesn’t use tobacco products and is in excellent health could get a 15-year term policy with $400,000 in coverage for just over $22 a month. 

(How much life insurance coverage do you need? Many experts recommend five to 10 times your annual salary.)

Don’t have kids but bought a house? If you and your partner are locked into a mortgage for the next 15 or 30 years, could your partner make the monthly payments on their income alone? If not, life insurance could help ensure that they can stay in their home if you pass away unexpectedly.

Another reason you might need life insurance in your 20s, whether or not you have children: Did your parents co-sign a private student loan that you’re still paying off? They could be on the hook for the balance if something happened to you. A life insurance policy could help them cover the cost of those payments.

That said, if you’re single, renting, don’t have kids and no one depends on you for financial support, you may not need to purchase a life insurance policy just this minute. 

“If you don't have any dependents, like children or disabled siblings, then you probably don't need any insurance at this stage in your life,” Brian So, a Certified Financial Planner, says. “But it may be worth considering getting some coverage now to lock in your eligibility while you're young and healthy.”

Applying for Life Insurance in Your 30s

“A lot can change in your 30s, and it's important that your life insurance changes with it,” says R.J. Weiss, a Certified Financial Planner who spent a decade as an insurance agent. “From a growing income, a larger mortgage, to a growing family, it's important to reevaluate your life insurance needs in your 30s.” 

Whereas things may have been a bit less certain in your 20s, you may now have a better sense of how many children you’re going to have, what your income potential is and when you might buy a home (or finish paying the mortgage on your existing home). That can make your 30s the perfect time to purchase a life insurance policy or augment the one you bought in your 20s.

Let’s say you have a 4-year-old and you take out a 20-year term policy. As long as you stay up to date on your monthly premiums, that would cover your family until your kid is 24, when they’ll (hopefully) be out on their own and self-sufficient.

Life insurance may not be as affordable in your 30s as it was in your 20s, but if you haven’t had any health issues crop up, there shouldn’t be a huge difference. 

For example, for the policies offered through Fabric, a 35-year-old woman who lives in Michigan, doesn’t use tobacco, and is in excellent health could get a 15-year policy with $400,000 in coverage for $22.86 a month (that’s less than a dollar more than the rate for a 25-year-old).

Checking Out Life Insurance in Your 40s

Your 40s is often your last chance to get a policy before life insurance rates really start to climb.

Whether you’re purchasing a policy for the first time or want to add more coverage as your family and salary grow, consider your expenses carefully. For example, you may be starting to focus more on saving for your kids’ college educations while helping out sick or aging parents and trying to pay down your mortgage. 

“During this decade, you'll start to see significant jumps in life insurance rates,” Casna says. “You may also have a pre-existing condition or two, such as high blood pressure or cholesterol.” 

For the policies offered through Fabric, a 45-year-old woman living in Michigan who doesn’t use tobacco products and is in good (not excellent) health could expect to pay about $44 a month for a 15-year, $400,000 policy.

One thing to take into consideration when shopping for life insurance in your 40s is your retirement savings. If you’ve been saving diligently since your early 20s, you may (hopefully?) have a sizable amount socked away for your golden years. Since that money will go to your family when you die, you may be able to get away with a smaller policy than you had in your 20s and 30s. 

However, if you’re closer to the average American, who has about $120,800 in 401(k) savings between age 40 and 49, you’ll likely want to keep a more robust life insurance policy in place. This is especially true if your children are still young and you have years of expenses, plus college, ahead of you.

There’s no perfect time to buy life insurance, only the best option for each individual situation. These recommendations for each decade won’t work for everyone because all of our situations are unique. 

To figure out what’s best for you, take the time to figure out how much your family needs in life insurance coverage to help ensure that they’ll be comfortable if anything were to happen to you.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

Fabric by Gerber Life exists to help young families master their money. Our articles abide by strict editorial standards.

Information provided is general and educational in nature and is not intended to be, and should not be construed as, financial, legal, or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. We make no warranties with regard to the information or results obtained by its use, and disclaim any liability arising out of your use of, or reliance on, the information.

Fabric by Gerber Life offers a mobile experience for people on-the-go who want an easy and fast way to purchase life insurance.

Written by

Jacqui Kenyon

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Term Life Insurance Policy Series ICC22 2205-4004 WSA and Accelerated Death Benefit Rider policy series ICC22 2205-2623 WSA (and state variations where applicable) issued by Western-Southern Life Assurance Company, Cincinnati, OH which operates in DC and all states except NY, and distributed by Gerber Life Agency, LLC using Fabric Technologies. Gerber Life Agency, LLC is an affiliate of Gerber Life Insurance Company (est. 1967). All are members of Western & Southern Financial Group (Western & Southern). Issuance of coverage for Term Life Insurance is subject to underwriting review and approval. Please see a copy of the policy for the full terms, conditions and exclusions. Product provisions, availability, definitions and benefits may vary by state. Payment of benefits under the life insurance policy is the obligation of, and is guaranteed by, the issuing company. Guarantees are based on the claims-paying ability of the issuer. Products are backed by the full financial strength of the issuing company.

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