Fact CheckedLooking for the Best Life Insurance for 30 year olds? Well, I have good news! It’s SUPER affordable, ladies and gentlemen. This is a great time to buy life insurance coverage.
Why?
Because you’re likely to be fit and healthy, life insurance companies give you preferential rates.
If you’re raising a family, life insurance is a no-brainer. It provides a financial safety net in case a tragic scenario unfolds.
Sure, we all want to believe we’re superhuman, but the fact is we’re all going to die. It’s just a question of when. So why not buy life insurance while the going is good?
30-somethings considering life insurance, read on! This is the post for you.
Why YOU Need Life Insurance
Everyone lives differently. That being said, if you want a family, your 30s is a great time to start. Many of my clients come to me in this decade because it’s when things start to get real.
So, what would compel someone in their 30s to get life insurance? I am going to share the most common situations now:
1. Income Replacement & Family
If you are in your 30s, chances are you have a job, some debt, and maybe even a mortgage. If you’re married and own a home with your spouse, a life insurance policy can protect them in case your income suddenly ceases due to an untimely death.
I think this is something couples often forget about when they move in together.
A dual-income family is a norm these days, so it’s essential to plan for detrimental situations BEFORE they happen.
Children are another reason to get life insurance coverage. Parents often look for the best life insurance for 30 year olds, when they realize how precarious their financial situation is and seek insurance advice.
…but this is not all!
2. Student Loans: Did Your Parents Cosign Your Debt?
A university or college education is COSTLY.
You may require a large loan if you are lucky enough to go to law or medical school. Often, family backs these loans up because of a lack of collateral. In your 30s, this debt may or may not be paid off.
If you still have student loans that your parents are responsible for, it makes sense to take out some term coverage to ensure they don’t have to pay the bill if something unforeseen happens to you.
You see? There are lots of ways life insurance can be used in your 30s.
“If you want to study at postgraduate level, the tuition fees are generally lower, and again vary depending on your program. Statistics Canada puts the average postgraduate tuition fee at CA$16,497 in 2018/19, which is approximately US$12,500, and only a one percent increase from the previous year. As is the case worldwide, executive MBA programs are generally the most expensive, averaging around CA$49,798 (~US$37,700), while regular MBAs cost CA$30,570 (~US$23,160) on average.”
How Much does it Cost to Study in Canada, TopUniversities.com
3. The Best Life Insurance for 30 Year Olds: Divorce
Marriages aren’t as resilient as they once were. The term “starter” wife/husband was created because some people marry very young, have children, and realize they are incompatible.
If you have a child with someone and you’re no longer married – a prerequisite of your divorce may be taking out a term policy to cover the loss of alimony or child support in the unlikely event of your early death. This protects the surviving spouse from financial issues that arise.
Even if the partner who dies isn’t providing financial support – time is money. This means if you have joint custody, a lot will change if there is a death.
It gets even more complicated if you have a second family. A life insurance policy may even be used to level out inheritances. But this is typically done with permanent insurance.
4. Entrepreneurialism & Protecting Your Business and Employees
The world is a different place today. I remember the days when you picked out a profession, got training, applied for a job with benefits, and stayed until you either retired or something better came up.
This isn’t the case now. People switch careers, jump from job to job, and start their own companies. It’s an exciting time that lacks some of the security of the past.
Entrepreneurialism is becoming increasingly popular because we have the tools to easily set up businesses. So, owning your own company in your 30s is possible.
If that’s the case, life insurance can protect your partners, employees, and clients from your untimely death. It also assures that your business continues even without you.
6. Future Insurability
You can depend on one fact—life changes.
While you may be as fit as a fiddle today, that can and will change. That’s why getting your foot in the “life insurance door” is a great idea when you’re young and healthy.
Rates are low during this period! Did you know you can add a guaranteed insurance rider to your coverage? Yep! This allows you to purchase more coverage without a medical exam after your term expires.
If your health declines, you’re not forced to take another medical exam – running the risk of being seriously rated or declined altogether.
Please ensure your policy contains a conversion option to switch your coverage to permanent insurance without reapplying.
7. Life Insurance ’til the Day You Die
On the other hand, permanent insurance protects your family until the day you die and usually has a cash value accumulation feature. This means there’s a guaranteed payout as long as you keep up with your premiums—which, compared with term insurance, can be pretty hefty even in your 30s.
The biggest problem is ensuring your payments don’t slip through the cracks during financial uncertainty. Sadly, this happens to many people, and they lose their shirts.
The Best Life Insurance for 30 Year Olds: Selecting the Type of Insurance
The type of insurance you select depends on your circumstances. For the most part, I find term fits the bill. But if you fall into the following categories, permanent insurance is an excellent tool if you:
- have an estate that needs to be protected from excessive tax
- are a high-net-worth individual, and your business is a cash cow
- looking for additional tax shelter because you maxed out everything else
- have a business or a child with special needs
- want to cover final expenses
Term Life Insurance in Your 30’s
Term insurance covers your income during the periods when you are most vulnerable. However, there is no guaranteed payout, which makes Term insurance much less expensive than permanent insurance. Typically, you can select 10, 20, or 30-year terms.
Life insurance is a business, so companies employ crack underwriters to review the results of your physical exam and questionnaire. They assess the risk the insurer takes when they provide you with coverage.
If the risk is low, they pass the savings on to you through a preferred rating. The more risk, the lower the rating and the more you pay.
How Much Coverage Does a 30 Something Need?
Your 30s are a complex time. People are waiting longer to have families so that you may travel Europe with your friends during the holidays, OR maybe you have a smokin’ career and a family.
Everyone is different. The one thing I know for sure is that generalizing is a bad idea.
Underestimating Needs is Common
Depending on when someone takes out their policy, $500K will be more than enough to cover you family. Hey that’s a lot of money and more than most of us will see in our lives at on time. But if you do the math, $500k will replace an after-tax salary (approximately $72k) for approximately eight years.
Does that buy your family enough time? Is this enough money to cover your current lifestyle when the insurance proceeds run out? Will there be other expenses? What about college?
When we examined it this way, my clients realize just how much of a loss a death really is. After reviewing your outgoings and your vision for the future, $500,000 may leave you woefully underinsured.
This is why it’s not uncommon to see $1,000,000 policies. It’s not as much as you might think.
Stay-at-home moms Need Life Insurance, Too!
Let’s not forget about women (or men) who stay at home with the kids. What happens if they die tomorrow with no life insurance? Will the surviving sprouse stop working to stay home and care for the kids?
The stay at home parent doesn’t earn an income per se, but how much would it cost to replace the their household contribution? Let’s say you have three kids and one child is a pre-schooler; the other two are in primary grades.
We often forget that a stay-at-home parent makes a valuable contribution to the family both socially and economically.
A full-time nanny would cost at least $40,000 annually for 10 to 15 years (likely more). Averaged out, $500,000 would cover it.
I recommend a $1 million policy that would cost someone in their 30’s under $50.00 monthly because it is affordable. For most people this isn’t a financial burden.
Different Strokes for Different Folks
Well, as you can see, many different scenarios exist. The long and the short is that each person has different requirements, and that’s why it’s so important to do a needs analysis and meet with an independent life insurance agent.
We review your medical history and financial situation (present and future) and discuss your goals. The cool part is that this consultation is free.
Call us today! We can help you find the best possible coverage for your needs!
“While just one in 10 Canadians say they’re not getting by financially, another 68 per cent say they “have to think about how they spend money.” And concern over jobs ranks seventh in terms of what worries Canadians”
“the most.It’s easy to understand where those concerns come from. Debt levels remain high. Wages are finally beginning to rise, but growth has been stubbornly low for decades.”
Despite a strong economy, cost of living still top of mind for Canadians, CBC.com
Picking the Right Company
Always work with a knowledgeable independent agent familiar with the ever-changing terrain of these companies’ underwriting policies.
Why?
Each insurer approaches medical issues differently. Some are more lenient than others for specific health conditions, which can save you a lot of money.
Let’s say the insurer you are considering is tough on Type 2 Diabetes, and you have it…this means you’ll spend a boatload more money than you should if you don’t do your homework.
Some carriers right out of the gate rate a healthy type 2 diabetic at 150%. If the standard rate is $50 per month, diabetics pay $75.
A few carriers consistently underwrite type 2 diabetes at standard rates, provided the applicant is healthy, and the diabetes is well managed. Wouldn’t you like to work with an agent who knows who these life insurance companies are?
Policy Architects to the Rescue for the Best Life Insurance for 30 Year Olds
So what’s the best life insurance for 30 year olds (and up)!?
As you can see, there is no one-size-fits-all sort of answer. I think a lot of people want instant pudding.
This explains the rise of automated life insurance. Log in to get the cheapest rates with little or no effort. Sure, there are some positive aspects to fast and easy…
But I will tell you that no food company has been able to replicate real pudding with instant variety. What’s missing? Time, effort, and the human touch. This is what we offer.
Policy Architects is a boutique life insurance agency. We are real people with real families. Our goal is to help you help your loved ones. Call us today because we care.
