Not only is your health better, but to insurance companies, the risk of paying a claim is much lower for an applicant in their 30’s.
Because of this, it is imperative to find the right term life insurance policy that will satisfy your current and future needs while the rates are still low.
If this is your first time purchasing life insurance, you may not know where to start when it comes to selecting a term or policy amount. After all, you are preparing for the future and you may not know what the future has to offer. With so much time to look forward to, you will need to consider both your budget and your future plans before you can select a policy that suits your needs. Here is a guide to help guide you in your journey to select the best term life insurance plan.
Your Life Insurance Needs
When you are younger, you need to consider how your life is going to change in the future. If you have young children, its imperative that you buy enough life insurance to pay for living expenses and school tuition until they can provide for themselves. If you recently purchased a house, you will need to consider the balance of your mortgage and the balance of other debts that you want to protect your spouse from. For younger applicants like you, the primary goal of buying life insurance is to provide protection to your family. As you age, your children will become self-sufficient, your mortgage will get paid off, and you can scale back the coverage you purchase to pay for your final expenses and to leave an inheritance to those you love.
Considering Your Goals
Life insurance is not one-size-fits-all for every single applicant. Here are some common questions you need to ask yourself to determine how much coverage you will need:
- Do you want to provide money for school for your children if you pass away? If yes, consider how many children you have and research the average cost of obtaining a degree.
- What is your mortgage balance?
- If you are renting and married, how long do you want to provide support for living expenses?
- How long do you want to provide your spouse with replacement income when you are gone?
- How much credit card debt and other debt do you have?
Different Types of Policies
As an applicant in your 30’s, you must consider the different types of insurance that are available. You will need to review the premiums for both term and permanent life insurance, based on how much you can afford to spend. While permanent life insurance does not have an expiration, the premiums are much higher. Term life insurance is far more affordable but will only have fixed premiums for a specified period of time. Most terms last 5, 10, 20, or 30 years. Generally, the longer the term, the higher the premiums. With this being said, it is wise to secure a policy that will lock in your rates until you do not have a great need for insurance.
Medical Exam or No Medical Life Insurance?
When you buy a standard life policy, the insurer will require you to pass a medical exam and an assessment of your prior health history. If you are young and you do not have medical problems, it is in your best interest to apply for a term policy where you are required to take a health exam. If you are in decent health and are needing a policy without the long underwriting period, you may be able to find insurers offering no medical policies. These policies are typically only popular among individuals in decent health that are needing a policy fast and older applicants because the premiums are much higher.
Make sure that you review all of your options before applying for affordable life insurance. Have an agent assess your needs, select an adequate limit, and do not forget the importance of choosing a term that will keep your premiums low long-term.