How To Choose the Right Life Insurance Policy for You by Age

The right time to purchase life insurance varies based on individual situations.

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Co-Founder and Financial Expert
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The right time to purchase life insurance varies based on individual situations. Depending on your family and financial circumstances, you’ll need to consider many factors when choosing life insurance. In general, most people invest in a life insurance policy if they have dependents or certain personal debts like a mortgage that will continue if something happens. The right type of life insurance and an adequate coverage amount for your needs will be dictated by your situation and your goals for purchasing a policy.

All types of insurance policies are designed to help limit personal financial losses resulting from an unexpected event. From health insurance and auto insurance to homeowners insurance and disability coverage, numerous policies protect various aspects of your life. However, life insurance is unique in that the policyholder’s beneficiaries are protected against financial losses upon the policyholder’s death. A death benefit is issued to designated beneficiaries and can be used to pay off debts, cover financial obligations, take care of funeral expenses, or provide supplemental income.

Depending on several factors, you will need to decide which type of life insurance policy is best for your situation. You will choose between a term life policy or a permanent policy. Both types of insurance have pros and cons, and choosing the right policy will require some research and consideration. You might even consult with a financial advisor to help you decide which type of policy fits into your larger family financial plan. One of the biggest considerations will be your age. Let’s take a look at selecting the right life insurance policy based on your age.

When To Buy Permanent Life Insurance


With a permanent life insurance plan, like whole life or universal life insurance, you are purchasing a policy that will be valid for your life. As long as you continue to make the monthly premium payments, your permanent life insurance policy will remain in effect. These policies are sometimes known as cash value life insurance policies because they have a built-in savings plan. Over time, your permanent life insurance policy will grow in tax-deferred cash value. A portion of your premium payments goes toward your policy’s death benefit, and another portion is set aside into an investment account that grows in cash value. Eventually, you can withdraw or borrow against the value of the policy.

Premium contributions to a permanent life insurance policy purchased at an early age can accumulate considerably over the long term. If held long enough, you might even be able to supplement your retirement income with your policy’s cash value. However, the money needs time to grow, so it is best to get an earlier start. While there are policies available for people of any age, purchasing a permanent life insurance policy after you are 60 years old could come with significant premium rates.

When To Buy Term Insurance


Term life insurance differs from a whole life or universal life policy in that it covers you for a specific period. Usually, people consider a term life policy because it can be valid for up to 30 years and will provide coverage during the year when there are dependent children and a mortgage payment. When these policies expire, children are usually on their own, and home loans have been satisfied. As a result, many people purchase term insurance when they are younger. Term life is less expensive than permanent insurance and is significantly cheaper when you purchase it in your 20s or 30s. However, a person of any age that is in relatively good health can purchase a term policy. As you get older, your term limits might become more limited.

In general, the best time to purchase life insurance is when you are younger and healthier. However, based on your needs and situation, you can find affordable life insurance at any age with some time, research, and comparison shopping.