How old should you be to get life insurance?
There's really no pre-determined age when it suddenly becomes necessary to take out a life insurance policy. However, if there are people who depend on your income - especially children or a spouse - there's a major benefit to taking out a policy when you're young.
When you take out a policy in your 20s or 30s, the provider takes into account that you're paying premiums for a number of years when, statistically, there's relatively little risk that they'll have to pay out. Unfortunately, that risk goes up a little with each passing year. It stands to reason that younger policyholders can lock in lower premiums than the aged.
However, it doesn't necessarily follow that every 25-year-old should run out and get insurance. From a financial standpoint, it really doesn't make sense unless you already have dependents. Even if the policy has an investment component - as is the case with whole life products - much of the premium is going toward insurance that you don't really need. You're probably better off putting that money directly into an investment account.
Here's an answer that will surprise you, but which is nonetheless true: you should be an infant when you get life insurance (obviously, your parents will pay for it :)
There are certain cash value life insurance products that are designed to accumulate significant amounts of cash over the long term. When taken out on the life of somebody a year old or less, they can perform extremely well over the course of decades. Their guaranteed cash rates are especially competitive. That cash could come in very handy when attempting to buy a house, start a business, or retire early.
Plus, the child will have the added advantage of being insured when he or she enters adulthood. If unfortunately they develop a medical condition, or take on a lifestyle risk of such as rock climbing, they will be grateful to not have to pay the going rate for a new policy.
You should go out and get life insurance when you have people who are dependent on you. A few life events to consider are getting married, getting pregnant (including your significant other getting pregnant for men), and buying a house.
If you have some of the above life goals, home, marriage or kids, and have a family history of illnesses, or are relatively healthy but have some health issues, you may want to be a bit more proactive and look into insurance on the earlier side. You may end up saving your money in the long run or ending up without the ability to obtain the appropriate coverage to insure your family.
Hope this helps,
Life insurance is designed to protect beneficiaries from the insured's passing. It could be to pay off debts, replace an income, final expenses, and/or business protection. There is not a set age on life insurance as children are covered many times simply for final expense reasons as to senior adults for final expense, debts, or a business interest. The key factor to determine is whether the beneficiary has an "insurable interest" in the proposed insured and what the figure is. Key persons at a business need to be protected, primary breadwinners, a stay at home spouse that provides valuable childcare services, business owners, etc., the list can be long. Hopefully this helps, good luck!
Jason R. Tate, ChFC, CLU, CASL
Q. How old should you be to get life insurance?
A. You should be old enough that someone else in your life is dependent on you financially.
When you begin looking for a policy, know that there are many types of life insurance. I would highly recommend you stick with term life insurance, and do not buy a policy as an investment strategy.
Wyatt A. Moerdyk, AIF®
Chief Compliance Officer
Accredited Investment Fiduciary®
10004 Johns Road
Boerne, TX 78006
Investment Advisory Services offered through Evidence Advisors, LLC, a registered investment advisor. Investopedia, LLC and Evidence Advisors, LLC are not affiliated.
That is a great question--and a common one. Please see the answers that David and Jason posted as they are both well done and very informative.
In my opinion life insurance has very little to do with your age. It really is a factor of do you have anything or anyone that you want to protect financially when you die. I will say that age does have a significant impact on insurability and RATES. Most people will have a decline in health as they become older and their coverage will get more expensive if they wait to apply. Even if you have a healthy lifestyle, factors such as elevated cholesterol and even hypertension (high blood pressure) will often rear their ugly heads. These conditions generally will not prevent you from getting insured, but they will hit your wallet a little bit harder...
When you have a chance you will want to explore the differences between term and permanent life insurance to see what is best for you. Good luck!