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Should You Buy Life Insurance in Your 30s?

Photo by Natasha Fernandez from Pexels

By buying life insurance in your 30s, you make an impactful, practical, and affordable financial decision to protect yourself and the people you love. 

It isn’t easy to buy life insurance because of the sacrifices and decisions you should make before settling on an insurance policy. The two oldest and most common life insurance varieties are whole life insurance and term life insurance. Insurance companies have tried creating more options to get more customers.

You Might Want Life Insurance If You Have a Family

In your thirties, you are either getting married, buying a house, or starting a family. This means that your financial responsibilities increase, and you have people depending on you financially. If something happens to you, your family might not pay bills in time without the income you were bringing home. 

Getting a life insurance policy gives your beneficiaries a death benefit if your death comes while the contract is still in place. The benefits can help them pay for their rent, groceries, medical bills, school fees, and other regular expenses.

You Might Want Life Insurance If You Have a Business

 Many people have businesses but don’t have succession plans if they die. If you get enough life insurance, you leave enough money to help your family handle the businesses the way you would be doing. For example, if you are a real estate agent and die in the middle of a project. What can your family do to handle your project? A succession plan is important to help your family in such times. 

You Might Want Life Insurance If You Have Other Debts

You can have a student loan, a credit card loan, or a car loan in your thirties. Studies show Americans who are in their thirties have deaths between $67,000 and $135,000. This does not come as a surprise because, in your thirties, it is time you are getting children and all the expenses that come with them. If you die, your debt does not go away with you. The debt goes to your family. 

If they cannot afford to pay the debt, they might end up selling some assets to cover the debt. This is the best time to get a life insurance policy while paying low premiums. As you grow older, your risks of dying increase. Because of this, insurance premiums increase with age. 

Term life insurance protects you for the period of the contract without a cash value component. For whole life insurance, you get insurance for a lifetime with an option to tap into a cash value component in your lifetime. Whole life insurance premiums can cost between 5-15 times more than term life insurance premiums, but the death benefits are the same. 

Advantages of Term Life Insurance

Term life insurance is cheaper. This is because it is simple and for a specific duration. If you want to get an insurance policy that protects your family if you die, term life insurance is the best option. 

You can define the time you want life insurance to cover you. For example, someone can choose an insurance policy that is long enough for their children to finish school and get full-time employment. 

For a 30-year-old man, you can get a term life insurance policy that is 20 years long with half a million dollars death benefit for approximately $29 a month. A 30-year-old woman can get the same policy for about $23 a month because her life span is longer.

Advantages of Whole Life Insurance

Whole life insurance premiums are level premiums. This means that the monthly rate you pay for your premiums remains the same throughout your policy. 

Insurance companies divide the premiums you pay into two parts; one part covers your insurance component, while the rest covers your growing cash value over time. Most insurance providers guarantee an interest rate of between 1 and 2% per annum. You can get a participating policy that pays and guaranteed dividends that might increase your total return. 

Although the insurance premium is higher than the insurance cost, as you grow old, the cost reduces to that of a thirty-year-old. Insurers call this front-loading a policy. You can borrow cash from the value amount to cater to your needs, like paying your children’s school fees.

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