Cheaper Life Insurance – What’s the Best Time of Life to Buy?

We are excited to feature a sponsored post about making life insurance decisions.

Most people don’t have a huge budget for everyday expenses so they can’t afford to pay more for life insurance than is absolutely necessary.  So is there a time of life when life insurance is at its cheapest, and if so when is this?

Time of life isn’t the only thing that determines life insurance premiums, you also have to consider any existing health concoctions, how much coverage is required and what type of health insurance is best for you.  So how do these considerations fit with the age question?

If I’m young is that the best time to buy life insurance?

If you’re looking purely at the cost of premiums for a life insurance policy purchased by a healthy young person then the answer to this question is probably yes.  It’s assumed that you will have a long time left to live so you’re a very low insurance risk for the provider.  This means that the amount you pay for life insurance will be relatively low.  But that doesn’t necessarily mean that you should rush out and buy a policy. Check out the AAMI life insurance calculator to find out exactly how much life insurance you & your family need.

If you don’t have anyone who is financially dependent on you then you need to think about who would actually be receiving the benefit of your policy; is it really worth insuring your life.  A reasonable cost is only reasonable if it’s for something that is vital to purchase.  Of course if you’re young and have dependents who will need financial support if you die then it’s definitely a good idea to purchase a policy as soon as possible.

What type of life insurance are you considering?

If you’re thinking of investing in term life insurance then premiums are likely to be lower when you’re young and healthy.  For people in this situation this type of insurance is the most popular.  It allows you to cover the financial disadvantage that your family may be at should you die.

As you get older and your family gets older the need for such coverage becomes less as mortgages are paid off and the payment of school fees ends.  In this case it’s a good idea to invest in life insurance as soon as you have dependents who are reliant on you.  The younger and healthier you are when this happens, the lower your premiums will be.

Whole life insurance is generally more popular with people who struggle to get term insurance, usually when they’re older or have health issues.  Premiums for whole life insurance are higher than those for term life insurance and are not as dependent on when you actually apply for the policy.

If your circumstances are such that you need to have life insurance than purchasing when you’re young and in good health is the best way to get the most affordable premiums.  But if you’re single with no dependents you should think carefully about buying a policy just because you think the cost will be relatively low.