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When should you get life insurance?

Clock in hand

When should you get life insurance? For many people, life insurance doesn't seem necessary until they reach a certain age, get married, or have children. However, life insurance can be beneficial at many different ages and stages of life.

Many factors go into choosing the right time to get life insurance. If you're young and healthy, it may feel like you don't need it. But, if you have dependents or financial obligations, life insurance can give you the security of knowing your loved ones will be ok if something happens to you.

What is life insurance?

Life insurance is a contract between an insurance company and a policyholder. The insurance company agrees to pay a designated beneficiary money (the "death benefit") upon the death of the insured person.

Most people buy life insurance for the sense of reassurance it can provide.

There are two main types of life insurance: term life insurance and permanent life insurance.

Factors you should consider when purchasing life insurance

Purchasing life insurance can be a daunting task, and it is important to find the right policy for your needs. When shopping for life insurance consider the amount of coverage needed, the type of insurance, any potential health concerns, if you have coverage through work and your stage of life. Here are some details to keep in mind when shopping for life insurance.

How much coverage you need

One of the first things you'll determine after deciding what type of life insurance to get is how much coverage you'll need. This will depend on your personal income and your family's needs. If you have a family or debts, you will need more coverage than someone who is single with no dependents.

Another thing to consider is your family's needs. If your spouse or child relies on your income, they will need more coverage than if they are financially independent.

Finally, you should consider your own needs and goals. If you want to make sure your family is taken care of after you die, you will need enough coverage to cover their living expenses and any outstanding debts.

By taking the time to assess your needs and goals, you can make sure you have the right amount of coverage.

>>Try our life insurance calculator to get a sense of your needs.

Whether term or permanent life insurance is a better fit for you

As mentioned, there are two common types of life insurance: permanent life insurance and term life insurance.

Permanent life insurance coverage lasts for your entire lifetime, as long as you continue to pay the premiums. These types of policies also have what's called a cash value component, which builds up over time and can be accessed using loans or withdrawals.

Conversely, term life insurance gives policyholders coverage for a set period of time, typically 10-30 years. After the term expires, the coverage ends and you will no longer be eligible for a death benefit. It's also generally less expensive than permanent life insurance.

When choosing a life insurance policy, it's important to assess your needs and budget to determine which is best for you.

If you have health issues

Something else to consider when purchasing life insurance is your health. If you have certain medical conditions, you may be uninsurable or have to pay higher premiums.

If you are healthy, you will likely qualify for lower premiums. However, if you have any health issues, it is important to disclose them to your insurance company. Otherwise, it's possible your policy could be void if you need to make a claim.

Your job and life insurance

If you work for a large company, you may already have life insurance through your employer. However, this coverage is often not adequate to cover your family's needs, so it is important to assess your need and consider supplementing it with an individual policy.

No matter what age you are, stage of life you're in, or what your occupation is, there is a life insurance policy that can meet your needs. By taking the time to understand your options, you can find the right coverage for you.

If you have children

If you have children, life insurance becomes even more important. Get enough insurance to make sure they are taken care of financially for years to come should something happen to you.

Consider purchasing a policy that covers both parents. This way, if one parent dies, the other will still have enough coverage to take care of the family. Another option is to purchase a policy that has a child rider. This allows you to add additional coverage for your children at a lower cost than buying separate policies.

No matter what stage of life you're in, it's important to have life insurance. By understanding your needs and goals, you can find the right policy for you and your family.

If you're a stay-at-home parent

If you're a stay-at-home parent, you may not think you need life insurance. However, this is often not the case.

Stay-at-home parents provide an essential service to their families by taking care of the home and children. If something happens to them, their families would likely have to pay for childcare or other services. Additionally, many stay-at-home parents are also responsible for managing the finances and running errands. If they were no longer able to do this, their families would be left in a difficult situation.

No matter what your occupation is, it's important to think about having life insurance. By understanding your needs and goals, you can find the right policy for you and your family.

If you're retired

When you retire, you may think you no longer need life insurance. However, there are still many situations where it can be a good idea to have coverage.

For example, if you have grandchildren or other dependents, you may want to consider getting coverage in case something happens to you and they need financial support. Additionally, if you have debt such as a mortgage or credit card bills, life insurance can help ensure that these are paid off if something happens to you.

If you're single

If you're single and don't have dependents, you might not feel like you need life insurance. However, there are still some situations where it may be a good idea to purchase a policy.

For example, if you have student loans or other debts, you may want to consider purchasing coverage. Additionally, if you are the primary breadwinner for your family, they will need financial support if something happens to you.

When should you get life insurance and at what age?

Many people believe only older adults with dependents need life insurance. However, securing a life insurance policy when you're young and insurability is more likely can have benefits.

Insurability means an insurance company is willing to provide you with coverage. When you're younger, you're generally healthier, which means you pose a lower risk to the insurer. This results in lower premiums, making life insurance more affordable when you're young.

If you wait until later in life to get life insurance and then develop health problems, your rates will be much higher if you're approved than if you had secured a policy when you were healthy.

For these reasons, it's best to get life insurance while you're young, in your 20's or 30's.

If you don't get insurance in your 20's or 30's, you should strongly consider purchasing a policy when you reach one of the following life stages and milestones.

You have children

One of the most important things you can do as a parent is to make sure your children are taken care of financially if something happens to you. Life insurance is one way to do that because it can help them still achieve some financial goals if you are not there.

You also may want to consider purchasing life insurance on your children to provide future insurability on their lives.

You get married

Getting married is often seen as a major life milestone and for good reason. Not only does it signify a commitment to your partner, but it also comes with a number of legal and financial responsibilities.

For many couples, getting life insurance is one of the first steps they take after getting married. There are a few reasons why this makes sense.

First of all, life insurance can provide financial security for your spouse in the event of your death, particularly as a form of income replacement. This is especially important if you are the primary breadwinner in your family. In addition, life insurance can also be used to cover things like funeral expenses or outstanding debts.

You're the primary earner for your family

As the primary earner for your family, you understand how important it is to have a solid financial foundation. You work hard to provide for your loved ones and make sure that they have everything they need. However, if something were to happen to you, your family would be left with a large financial burden. This is where life insurance comes in.

If you were to pass away, life insurance would provide your family with the financial support they need to maintain their standard of living. In addition, life insurance can be used to pay off debts, fund education costs, or cover other expenses. While no one likes to think about their own mortality, it's important to take steps to protect your loved ones in the event of your death. A life insurance policy is one way to do that.

You own a business

If you own a business, life insurance can be an important tool for protecting your company in the event of your death. If you are the sole owner of your business, your family will likely inherit the business upon your death.

However, if you don't have life insurance, they may not be able to keep the business running. In addition, if you have partners or co-owners, life insurance can be used to buy out their share of the business in the event of your death. This ensures that your family or partners are taken care of financially and that the business can continue to operate without interruption.

You have a mortgage

If you have a mortgage, it's important to have enough life insurance to cover the balance of your loan in the event of your death. That way, your loved ones won't be burdened with the debt.

You have private student loans or other debts

If you are struggling with a large amount of debt, life insurance can be a helpful tool. If you die unexpectedly, the death benefit from your life insurance policy can be used to pay off your debts.

This can be especially beneficial if you have private student loans, as these are not dischargeable in bankruptcy. (Federal student loans are discharged upon death.)

You might develop an illness

No one likes to think about their own death, but it's important to make sure you have your affairs in order in case the worst should happen. If you have a family history of illness, it's especially important to get life insurance. While no one can predict the future, having a policy in place will give you peace of mind.

Keep in mind, however, a family history of illness can be a concern when it comes to life insurance. If you have a parent or grandparent who has suffered from a serious condition, you could be classified as a higher-risk applicant. As a result, you may have to pay more for your life insurance policy or be denied coverage altogether. Make sure you apply, however, and find out if this is the case for your specific situation.

You simply want to be responsible and helpful

Even if you don't meet one of the life stages or milestones above, it's still a good idea to get life insurance because it's the responsible and helpful thing to do.

If you get life insurance when you are healthy and young, it can be relatively affordable and a great way to protect your loved ones if something happens to you.

Work with a financial advisor

If you're thinking about getting life insurance, it's important to talk to a financial advisor to see if it's right for you. They can help you figure out how much coverage you need and what type of policy would be best for your situation.

As far as when to get life insurance, reaching many of the life stages above are an ideal time to consider it. However, if someone relies on you or would be burdened financially by your death, it's a good idea to explore the idea of getting a life insurance policy.