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When Should You Buy Life Insurance?

Christy Bieber
Cole Tretheway
By: Christy Bieber and Cole Tretheway

Our Insurance Experts

Ashley Maready
Check IconFact Checked Ashley Maready
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Life insurance has obvious benefits -- it pays your dependents when you pass away -- but planning for it can sometimes be tricky. When should you buy it, really? There's a simple answer to that.

You should buy life insurance when you have dependents who your death may financially injure. In other words, if a loved one depends on you for money, you should consider taking out a life insurance policy. That way, they or their caretaker can pay the bills after you pass away.

Still on the fence? We get it. This guide will give you insight into the best time to buy life insurance so you can purchase with confidence.

When should you consider buying life insurance?

You should consider buying life insurance when you have dependents or anticipate having them soon. It's that simple. There is no other reason to buy life insurance.

Hang on. Think twice before you decide whether you want life insurance, right here and now. The definition of "dependent" is more flexible than you might think. And you may want to purchase life insurance a bit earlier or later than you anticipate.

We'll go through some common and less common reasons to get life insurance right now. That way, you can easily decide whether now is the right time to buy.

READ MORE: Is Life Insurance Worth It?

Before getting married or having kids

Yeah, we know. At first glance, it makes no sense. Why buy life insurance before you get married or have kids? The reason: price. Buying life insurance is cheaper when you're young and healthy. You can lock in cheap rates by purchasing a policy a little early.

Why is that? Life insurance companies are betting you'll live through your coverage term. So, they offer better rates to young, healthy folks who are unlikely to die while covered. Some great insurance companies even cap the age at which you can buy policies.

You can take advantage of low rates by locking them in your 20s and 30s, and doing so before you develop what's known in insurance as a "pre-existing condition." In other words, it may be worth purchasing a 20-year policy now to lock in lower rates.

Shop Around: Best Life Insurance For Young Adults

After getting married

If your passing would make finances difficult for your spouse, you should consider taking out a life insurance policy for yourself and designating your partner as beneficiary. It could help them pay the bills. For example, if you pass away while you and your spouse are paying off a mortgage, your policy would help them cover the cost of housing.

Another consideration is funeral costs. Funerals are expensive, especially nice ones. You could take out a life policy, designate your spouse as the beneficiary, and ask them to use it to cover the cost of hosting a funeral. It could give both them and you peace of mind.

Shop Around: Best Cheap Life Insurance

After having children

The superhuman effort that goes into raising kids is no joke. For one thing, raising kids is expensive. Consider purchasing yourself a life policy and designating kids or a spouse as beneficiary. That way, you can still contribute financially to raising your kids should you pass away before they come of age.

Things a life insurance policy can help loved ones pay for:

  • Daycare and schooling
  • Mortgage payments
  • Post-graduate education

Some parents buy life insurance for adult children. Mine did, to my surprise. I consider myself financially independent -- and told them so -- but buying a policy brought my parents peace of mind. If taking out a life insurance policy improves your mental health, it's worth considering.

Shop Around: Best Life Insurance For Families

After purchasing a home

Co-owners and family members should consider taking out a life insurance policy after buying a home. That way, beneficiaries can still make payments, even though the policyholder is no longer contributing to the monthly mortgage.

After starting a business with partners

Often, it makes sense for surviving business partners to buy out the deceased person's stake. That way, the deceased's family can get paid, and the surviving partners can continue to run the company without their interference. Buying a life insurance policy and making partners beneficiaries can provide the funds to keep a business alive.

When to buy term life insurance

Term life is the best type of life insurance for most people. It's simpler and cheaper than permanent life insurance. In each example above, taking out a term life policy versus a permanent one makes sense -- regardless of whether you're young, old, healthy, or ill.

Term life policies are temporary. They only pay out if the policyholder dies during the coverage period. For example, a 30-year term life policy purchased at age 20 would last until age 50. Unless the policyholder dies before 50, the policy won't pay the death benefit.

Many great term life policies place upper age limits on when you can get covered. While seniors may be able to buy life insurance for seniors, it's often very expensive. It's easiest to lock in cheap rates while young and healthy.

READ MORE: Term Life Insurance Explained


How much life insurance should I purchase?

Term life insurance policies let you take out coverage for up to 30 years typically. But you might not need that much coverage. Raising kids? Consider taking out a 20-year policy that expires a little after they become legal adults. Adjust your term to your needs to earn the best rates.

When to buy permanent life insurance

Permanent life insurance remains in effect as long as policyholders pay premiums. It's much more expensive than term life insurance. You can buy it young to save on premiums, but you may not need it for quite some time.

Consider buying permanent life insurance only once you decide a beneficiary needs lifetime protection -- for example, if you have a disabled child who will always need care.

For those who don't need permanent coverage, term life insurance is the better bet.

LEARN MORE: Permanent Life Insurance: What Is It, and Should You Buy It?

The cost of waiting to buy life insurance

It makes intuitive sense to wait until the last possible second to buy a life insurance policy. What's the rush? We'll tell you. Below are three reasons not to put it off until the last second.

More expensive premiums

The best life insurance companies offer affordable monthly premiums. That's especially true when buying a policy at a young age. The older you are, the more insurance costs. Consumers who want to lock in protection at the lowest rate shouldn't delay in getting covered.

Consider looking into a policy a year or so before you need it. That way, you may be able to lock in better premiums and pay less over the life of your policy.

Increased chance of being denied a policy

It's easy to forget to consider the risks of getting sick. Certain health conditions can make it expensive or even impossible to buy term life insurance. It's best to buy coverage before developing serious medical problems.

Leaving loved ones unprotected

It's too late to buy life insurance once you're dead. If you want to cover your loved ones, do it when you've got the means and the foresight. You could mistime coverage by attempting to buy it at the last minute, potentially leaving loved ones without support when they need it most.

When to not buy life insurance

Don't purchase life insurance when you have zero dependents and will continue to have zero dependents for the foreseeable future. Life insurance protects your loved ones who rely on you financially. You have little reason to take out a policy if nobody relies on you financially.

One exception: If taking out a policy for a financially independent loved one brings peace of mind, it's worth considering. Few things can buy inner peace; life insurance is one of them. If you can afford a policy that brings you peace, feel free.

If you have zero dependents, consider alternative safety nets. You may be better off investing in an emergency fund than life insurance. You can do so by opening a high-yield savings account and slowly accumulating three to six months' income for emergencies.

How to buy life insurance

Once you know when you should get life insurance, you've got to purchase it. Don't worry. Once you break it down, it's actually pretty straightforward.

Here's how to buy coverage:

  • Determine how much coverage to buy. How much death benefit do you want your beneficiaries to get paid? A good rule of thumb is 10 times your yearly income.
  • Shop around for insurance. Get quotes from three to five insurance providers or more. Prices and terms vary. (Don't worry, it won't hurt your credit score.)
  • Submit an application. Applicants must detail their health history. Many life insurers require a medical exam. But there are great no-exam life insurance policies.
  • Read the fine print. Make sure the coverage provides your desired death benefits. Check policy exclusions or limitations that might limit payouts.

Once approved, your loved ones will be protected. Many policies have waiting periods before they take effect. You may want to take out a policy a bit earlier than you need it to account for the delay.

READ MORE: How to Buy Life Insurance, a Step-By-Step Guide


  • Yes, if you have dependents relying on your income. Dependents are not just children. Spouses and business partners who rely on you financially count, too.

  • It depends on their family and financial situation. There are several good approaches to deciding how much coverage to buy. Multiplying income by 10 is one. A 25-year-old could also use the DIME (debts, income, mortgage, education) method to estimate the necessary coverage amount.

    To do this, calculate the following:

    • Debt your beneficiaries are responsible for
    • Income your beneficiaries must replace
    • Years beneficiaries must rely upon replaced income
    • Mortgage balance, if applicable
    • Higher education costs

    Add up everything to estimate how much coverage you should take out.

  • The cost of life insurance varies by age, health status, insurance company, and death benefit amount. Term life insurance is much cheaper than whole life. You can often purchase term policies for cheap when young and healthy.

  • It depends on the policyholder's family situation. Coverage should be in effect for as long as anyone depends on the policyholder's income or services. Often, it's a good idea to make the term last until you retire or children graduate from college.

  • Maximum age varies by life insurance company, although it's often possible for people in their 60s or 70s to buy term life insurance. However, premiums will be much more expensive.

    There are even some policies that don't have a maximum age. These are often "guaranteed issue" policies that don't require a health checkup, but these have limited death benefits.

    Don't put off deciding when to get life insurance. Purchasing it at a younger age makes coverage more affordable, and it's possible to over delay coverage.

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