If You’re Between 28-35 Years Old, This Might Be The Best Time to Buy Life Insurance
When I turned 25, my parents set up a meeting with their insurance agent to sign me up for a life insurance policy. I was single, with no kids or even pets, and barely making enough money to pay the rent.
I got the policy, but never understood it. A few years went by, and I let go of it.
“Consumer demand for life insurance is greater than actual ownership,” according to the 2018 Insurance Barometer Survey by LIMRA. In other words, we think we need it, but still don’t have it.
The same survey notes that 44% of millennials overestimate the cost of life insurance by about five times the actual amount.
OK, so it’s probably not nearly as expensive or as difficult as you think. If you want to see just how much it would cost you, take a couple of minutes to get a free quote online. If you’re young and mostly healthy, consider purchasing term life insurance online from a low-cost company like Ethos.
But… do you need it?
We asked three insurance pros to weigh in on the life insurance needs of a bunch of different personas. Here are the three people that the pros suggest should get life insurance right away…
Wesley, 28, A Newlywed With Big Plans
Wesley is a 28-year-old newlywed. He and his wife have no children (yet) but they are proud, new homeowners. Both Wesley and his wife work full time.
Quinc Pearcy, financial planner and wealth manager at Fort Wealth Management in Houston, Texas, sees some benefit to signing up for a policy early.
“I would go big here,” said Pearcy. Wesley and his wife are both young enough, he said, “they would have no trouble qualifying for a large term policy. The amount would need to be enough to cover any outstanding debt: credit cards, mortgages, car notes, kids, college funeral costs.”
At this age, you might be able to get up to a $1,000,000 in life insurance from Ethos for a measly $30 bucks a month.
Mike Windle, a retirement planning specialist at C. Curtis Financial, Plymouth, MI agrees that Wesley and his wife are in prime position for life insurance.
“Both Wesley and his wife should get insurance, again the first place is with their work (if offered) but with owning a home and relying on two incomes, it would be important they both have enough insurance to pay off the house and replace their income should one pass away.”
The verdict? Yes! With a spouse and a home, Wesley is firmly in the realm of those who need life insurance.
Dora, 31, Engaged Entrepreneur
Dora is a 31-year-old entrepreneur who owns her own bakery. She is engaged, has two dogs and no kids. She employs four people at her bakery.
Pearcy believes the business is a big factor for Dora.
“Without proper planning, the premature death of a business owner may result in assets having to be liquidated, the business being sold or the business becoming a burden on family members,” Pearcy said. “She must consider the four employees she has as they are dependent on her business for their income.”
“Dora is definitely a candidate for insurance,” Windle agreed. “She should have enough insurance to pay off her business debt and personal debt.”
The verdict? Yes. Dora’s business means she could have considerable debts and people counting on her. The dogs? She could even factor them in if she wanted.
If you’re in a situation like Dora, use this free tool to see how much life insurance would cost.
Dan, 35, Homeowner and New Dad
Dan and his wife are in their mid-30s and are new parents to a baby girl. They own a small home. Each of them works full time making $50,000 to $70,000 annually.
“This is the most common client we see,” said Pearcy. “Married with kids and steady income. A lot to protect. I would build them a large 30-year term on both, as much as they can qualify for, with a child term rider for the new baby. The rider is inexpensive and means they do not have to buy her a separate policy.”
A child term rider is basically life insurance for the child of the primary insured person. As an add-on, it’s usually quite affordable with our top life insurance companies like Ethos.
Windle also sees Dan as a prime candidate.
“Dan and his wife now have the added (financial) burden of a child so having insurance for each of them makes a lot of sense. By having $400,000 to $600,000 each, they should be able to ensure that their spouse and daughter will be taken care of should anything happen to them.”
The verdict? Oh yeah. These guys are right in the life insurance sweet spot. They’re young enough to get good rates, and have enough responsibility to really need it.