Life Insurance: At What Age Do I Need It, and How Much?

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The following is a guest post. Enjoy! 

According to Tony Steuer, a life insurance consultant and the author of Questions & Answers on Life Insurance: The Life Insurance Toolbox, “Financial planning is always a moving target”; Mr. Steuer couldn’t be more accurate.
Due to this, there are no set formulas, or variables, for an appropriate age for insurance, or for how much you’ll need at whatever age you choose to buy—no one individual has the same financial obligations as another. You have to take inventory of all of your financial obligations, make an educated guess on what you’ll need in the future—which alters based on your age—and customize a policy to your needs.


·         In Your 20’s? At this point, rates are as affordable as they will ever be. Predict having a family in the next 10 years? You can purchase a 30-year-term policy covering $500,000 for $350 to $400 per year, at a fixed-rate.
·         In Your 30’s? Family, assets, and debt—all of these need to be considered, and if you didn’t buy in your 20’s, a policy is going to be a little more expensive, and you’re going to need around 10 times your income to adequately cover all of your bases.
·         In Your 40’s? Don’t wait any longer—as soon as you enter into your 50’s, rates will sky rocket! At this point, you’ve also accumulated significant assets and possibly have kids heading to college. If something happens to you, don’t you want to ensure that their futures are intact?
·         In Your 50’s? Hopefully, by now, you already have life insurance and only need to adjust according to how your assets have changed. If you purchased in your 20’s, your term is about to expire and it’s the perfect time to stop insuring what you don’t need insured anymore (i.e. a paid off mortgage) and possibly reinvest in trusts for grandchildren.


As a general rule of thumb, financial experts suggest purchasing a policy that covers 5 to 8 times your current income; in some cases, 10 times your income. Deciding where your needs fit within that range can be determined by going to a financial expert with these questions already answered:

  • How much of the income generated by your family do you supply?
  • If tragedy were to strike, by what means would your family get by? Do they have any support other than what you provide?
  • Do you financially support any family members that aren’t an immediate part of your household? (i.e. grandmother in a nursing home, a home nurse for another relative, etc.)
  • How much money do you want set aside for your children to attend college?
  • Do you currently have any debt that you’re paying down? If you were to pass, would your family inherit the responsibility of that debt?
  • Are there trusts for your children, or grandchildren, you want to establish?
  • Is there a charitable organization that you support that you wish to leave money to?
  • Will your family inherit any applicable estate taxes, if you were to pass?
  • Have you considered how inflation will affect the future needs of your family?

No matter your age or where you live, it’s important to get the right information when considering coverage.  Life insurance shoppers should do their research before pulling the trigger and always use a trusted provider.

How about you all? Do you have life insurance yet? If so, how did you make the decision that you needed the coverage? What type of coverage do you have – term, whole, or universal?

Share your experiences by commenting below!

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  1. Pauline @ Reach Financial Independence says:

    I don't have kids yet and plan on waiting to have dependents to get life insurance. I prefer to save money and build a net worth. But you make a good point with the low rates for younger persons.
    My recent post Big city life, is it worth it?

  2. myfijourney says:

    I'm in my 30s with no life insurance. But I have no dependents, unless you count the cat, so I don't really see the point. If my situation changes, then I'll consider it, but until I have a dependent I just don't view life insurance as a worthwhile expenditure.
    My recent post Recent Buy – Norfolk Southern (NSC)

  3. studentdebtsurvivor says:

    I have life insurance through my employer (it's free they pay for it). It's not a lot but it would be enough to pay off our condo if I passed, so that my bf wouldn't be stuck paying for it by himself on his salary alone. When we have kids I'll definitely buy additional coverage.
    My recent post My $30,000 Student Loan Mistake

  4. genyfinancejourney says:

    I also have a very small amount of life insurance from my employer (one year's salary), but once we have kids we'll get more coverage.
    My recent post Conquering the “Next Month Will be Different” Mindset

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