Life insurance is cheaper the younger you buy it. Waiting, even a year, can make a 3% to 8% difference in your premiums. Life insurance for a 30 year old is about as cheap as it’s going to get.
Not everyone needs life insurance in their 30s. It depends on what’s going on in your life. Do you have a family? Are you married? Does anyone financially depend on you? Those are the big questions to consider.
Quick Summary
Age 30 might be the best time to buy life insurance. The rates aren't much higher than anytime in your 20s. If you are like most of your peers, you aren't going to get healthier.
Still, there are ways to save money so you don't overspend. Overspending now has significantly worse impact on your long term finances than if you were, say, 45. All the extra years of compound interest on your retirement and investments, make saving money here twice as important.
Make sure you know why you are buying life insurance. That will tell you what type of policy you need. Use a life insurance calculator to ensire you aren't overbuying. Finally, work with an independent agent. They can compare companies for you, saving time making dozens of phone calls to find each company's rates.
How to Save Money on Life Insurance for a 30 Year Old
The tips below reflect advice across a wide range of circumstances. Pick and choose what works best for you. Keep in mind that your situation may change as you progress through your 30s. Revisiting your life insurance if you buy a house or add more children to your family will make sure that you stay covered.
Use a Life Insurance Needs Calculator
The best way to save money on life insurance is making sure you aren’t buying too much. You see all sorts of advice on how much you may need floating around the internet. A lot of it doesn’t make much sense. You’ll see advice ranging from 3 times your annual income to 20 times your annual income.
Someone with a spouse and no kids is going to have very different needs than someone with a spouse and three kids. Then there are mortgages. A single-family home could run you $100,000 in one part of the country and $500,000 for the same size house in another region. Those families will have different life insurance needs.
A life insurance needs calculator can tell you exactly how much life insurance you should consider. It considers mortgages, student loan debt, credit card debt, number of college-bound children, plus a whole host of other factors.
Once you know how much life insurance you need, you can use the Instant Quotes tool on the left to compare rates from different companies. (Top if you’re on mobile.) That way you can get a good idea of pricing before even speaking with an insurance agent.
Layer Your Policies
Life is pretty crazy insofar as how much things can change from year to year. But over-buying insurance to cover all the things that might happen is not one of the most fun ways to spend money. Instead of buying one large policy to cover all your needs, buy in smaller increments as the needs arise.
It's easier to build a study wall out of several smaller bricks than find one big rock to do the job. Life insurance works the same way. Each smaller policy has its purpose to serve.
For example, let’s say this year you have a spouse and two kids. You and your spouse agree that you want your life insurance to last until your children reach adulthood. You may look at a 20-year term to cover that period. Next year you suddenly find that you are buying a new house. It would be wise to consider a 30-year term to ensure your spouse can pay off the mortgage if anything happens to you.
Layers make insurance both more flexible, and more affordable. Buying one large policy to get everything over with usually means there are oversights or you’re paying way too much.
Have multiple policies of varying durations and amounts to cover specific needs. This will be less expensive than buying one large policy for 30 years.
Have an Independent Agent Run Quotes for You
There are two types of life insurance agents, independent agents and captive agents. Independent agents can sell products from many companies. Captive agents are contractually bound to one company.
Now, this isn’t the end of the world for most people. If you’re shopping around, you will most likely end up speaking with both types of agents. The captive agent will show you quotes from their company. The independent agent will narrow down the dozens they work with to the best for your situation and compare several for you.
The major difference here is the underwriting. Each company has separate underwriting guidelines. This is particularly important if you have any pre-existing medical conditions. Company A might have no problem with your condition. Company B might charge you an extra 50% in premiums. An independent agent can immediately narrow down options to the companies who have the best underwriting guidelines for your situation.
Take the Medical Exam
Most people in their 30s are insanely busy. Career building, young children, aging parents, and buying a home is just the start of the craziness. But if you can fit an extra hour into your week for the medical exam, it is worth it.
When you don’t take the medical exam, insurance companies assume there is a reason you don’t want to. The reason could be that you don’t have the time or you don’t like needles. But insurance companies tend to assume people are trying to cheat their way out of paying premiums. So while a company may offer no-exam policies, they need to charge more for it.
Taking the medical exam is an easy way to save money. Think of it like an easy routine check up.
As a bonus, since you usually schedule the medical exam a week or two ahead of time, there are ways to boost your results. Switching up your diet for the week or two preceding the medical exam, and drinking tons of water can help. Taking the medical exam can save you money. You can save even more if you prepare for the life insurance medical exam.
Term is Cheaper than Permanent, But It’s Not For Every Situation
Term life insurance costs less than permanent. Makes sense, right? You may live beyond your term, but everybody dies eventually. It comes down to what you need your life insurance to do.
If you’re pretty secure in your finances and you want to have life insurance to cover your entire life, permanent might be a good choice. Aside from the death benefits it also has a cash value accumulation portion. This cash value builds up over time and works as a no questions asked loan. If you want to borrow against your life insurance policy, you can.
Permanent life insurance can be a great tax-free supplement for your retirement income. Learn how this works with our free video course on building tax-free wealth.
If you are only looking for something to cover your children while they’re still minors or cover a mortgage, term might be better for you. It will save you money and serve its purpose. No sense paying for something that doesn’t materially benefit you.
For families where the cost of life insurance is worrisome, consider a term policy now with a conversion option. That way you can decide later whether or not to turn your term policy into a permanent one. It’ll give you a decade or two to build up a little more disposable income.
Term Conversion Options are Great for Young Families
It’s difficult to predict what your life will be like next year. Guessing 20 or 30 years from now is almost impossible. Many life insurance companies have term conversion options. This lets you turn your term policy into a permanent life insurance policy near the end of the term.
One of the major perks is that conversions do not take health into account. If you’re healthy now but have develop a medical condition in 20 years, that won’t affect your rates. Your new rates (when you convert the policy) will only be based on your age.
If you think you might want a permanent policy now but worry about affording it, then talk with your insurance agent about a conversion option.
Do I Need Life Insurance at 30?
Not necessarily. It will depend on what’s going on in your life.
The answer depends on what's going on in your life. It all boils down to whether or not you have people financially dependent on you.
People in the following circumstances may not need life insurance.
- Single
- Cash to cover burial expenses
- No children
- Your death would not significantly financially impact your spouse
- No cosigners on any debts
Children are the big reason to get life insurance. They’re wonderful and expensive. They also cannot support themselves. So it’ll fall to their other parent to entirely care for them if something happens.
Even if you’re divorced and don’t want to name your child’s other parent as beneficiary, you can set up a trust to financially provide for your child.
Term Life Insurance for a 30 Year Old Male
These monthly rates reflect a man who is moderately healthy and doesn’t smoke. There is a good chance you may be healthier and get even lower rates if your height/weight ratio is normal and you don’t have any pre-existing conditions.
Male Rates | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
10-Year Term | $8 | $11 | $17 | $28 |
20-Year Term | $11 | $16 | $27 | $48 |
30-Year Term | $14 | $24 | $41 | $72 |
Term Life Insurance for a 30 Year Old Female
The table below reflects monthly rates for a woman who is pretty healthy and doesn’t smoke. Female rates are almost always cheaper than men’s rates.
Female Rates | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
10-Year Term | $8 | $10 | $14 | $22 |
20-Year Term | $9 | $14 | $21 | $36 |
30-Year Term | $12 | $20 | $33 | $57 |
Permanent Life Insurance for a 30 Year Old
Whether or not you should get permanent life insurance will depend on your reasons for buying life insurance and your financial situation. It’s more expensive than term insurance.
There are some extra perks. You know that no matter when you pass on, your family will be financially taken care of. Whether that’s in 10 years or 60 years, the insurance company will pay out.
If you develop a complex estate which could take years to sort out in courts, the life insurance will pay out much faster so your family will be financially taken care of. Life insurance benefits are also tax-free.
The cash value accumulation is a no questions asked loan. Many couples use it for funding vacations. Others use it to pay for surprise medical expenses when their money is tied up elsewhere.
No Exam Life Insurance
No exam life insurance works exactly the same way as traditional life insurance, except you don’t take the medical exam.
The medical exam is not most people’s idea of a good time. So more and more companies are offering no exam policies, which is breeding competition. This dramatic increase in competition on no exam policies means that rates are plummeting. They’re still somewhat higher than traditional, policies. But they’re getting much more reasonable.
The other way life insurance companies mitigate potential losses on no exam policies is through limiting the benefit amount. Most will not offer a benefit higher than $250,000. But there are a few who will offer no exam policies with $500,000 benefits. One company is trying out offering a $1,000,000 no exam policy.
Life Insurance at 30 with Pre-existing Conditions
The most important thing you can do to save money on life insurance with pre-existing medical conditions is to be upfront with your insurance agent. It can be awkward telling a complete stranger about your medical history, but that’s their job.
The more information you can give your insurance agent up front, the better job they can do sorting through all the life insurance companies to find you the best few for your medical condition.
Giving your insurance agent the information up front will also prevent sticker shock when offers come back from underwriting.
Underwriters want to know everything about you from what medications you're taking now to any surgeries you've ever had.
Have the following information handy when you start comparison shopping for policies:
- Condition
- Severity
- Date of diagnosis
- Any hospitalizations (& dates)
- Medications
- Medical procedures
- Height & weight
- Smoking (yes or no)
Underwriters at every company will have specific questions related to each medical condition. Talk to your insurance agent about prescreening your application.
Conclusions on Finding The Best Life Insurance Policy for a 30 Year Old
Use an independent agent. Tell them exactly how much you need and what you are specifically looking to cover. Comparing several companies is the best way to save money. Also being up front about any pre-existing medical conditions can eliminate any company who will charge you too much.
Life insurance is a way to show someone that you care. If you have someone who is financially dependent on you, it's a loving gesture. Questions? We are here to help. Ask us and get peace of mind today.
How Abrams Insurance Solutions Can Help
We are a small group of independent life insurance agents. Our goal is to help people find policies to protect their families at rates that won’t stress their wallet.
With work with 70 of the top-rated companies in the United States. We believe that a financially stable life insurance company is the only way to go. Many of these companies that made the cut also offer better rates for people with pre-existing medical conditions.
The Bottom Line
We work for you, not the insurance company. If one insurance company tries to treat you unfairly, we won’t rest until we find a better offer.
If you are 30 years old and thinking about life insurance, give us a call today at 858-703-6178. We are always here to answer questions, and there is never any obligation to buy.
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* This article was originally published here
