Pros and cons of buying life insurance at any age

There are benefits and drawbacks for both young adult and senior shoppers

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Alani Asis

Alani Asis is a personal finance writer with nearly three years of experience in the space. She has worked with leading publications and brands cover…

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Ross Martin

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Ross joined The Zebra as a writer and researcher in 2019. As a licensed insurance agent, he specializes in writing insurance content to help shoppers…

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Susan Meyer

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Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

The decision to buy life insurance is a complex one. As a senior, age limits and high monthly prices can make you feel like it's too late to purchase a policy. As a young adult, paying for funeral expenses may be the last thing on your mind. However, life insurance can be a crucial financial tool, no matter how young or old you are.


What is life insurance?

Life insurance is a type of policy that promises to pay your beneficiaries (the recipients of your life insurance policy) an agreed-upon fixed amount (death benefit) when you pass away. You must pay a monthly or annual price (premium) for your policy to remain in force.

Life insurance offers financial protection for your dependents. It replaces your income so your loved ones can cover costs like the mortgage, funeral expenses, your children's education and other financial obligations.

Types of life insurance coverage

Purchasing life insurance may seem challenging if you don’t know where to start. Three common temporary and permanent life insurance types are term, whole and universal. The type of insurance product and amount of coverage you choose will depend on your personal needs.

Term life insurance

Term life insurance is an excellent way to secure coverage at an affordable cost. However, as the name implies, this life insurance option is temporary.

This life policy can offer coverage for a specified period, like one, five, 10, 30 and even up to 40 years. You'll pay the same monthly or annually during the policy term. However, when your term life insurance policy ends, you'll no longer have coverage unless you renew it again. Keep in mind that your premiums may increase at renewal.

Whole life insurance

Unlike term life insurance, a whole life insurance policy lasts your entire life. Depending on the type of whole life insurance policy you choose, the cost of your policy never increases or decreases so you won’t have to worry about higher premiums.

You also have access to a wealth-building tool called cash value, where you can allocate a portion of your premium payment toward the savings account. Because whole life insurance offers life-long coverage at a fixed rate with guaranteed cash value growth, it's typically the most costly policy to buy.

Universal life insurance

Universal life policies, like whole life insurance, offer permanent life insurance policies. However, you can adjust your premiums when necessary instead of paying fixed premiums. So, if you need less coverage because your children graduated college or you paid off the mortgage, you can opt to spend less on your policy by decreasing the death benefit and in turn paying lower premiums.

You also have access to a cash value account. Unlike a whole life insurance policy, cash value growth isn't guaranteed. However, you can place your funds in riskier investments like the stock market to garner higher returns.

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How age affects your life insurance premiums

Life insurance rates vary by person. Factors that may influence your life insurance costs include your gender, if you’re in good health, your occupation, your lifestyle and even your credit score. This is why your insurance agent will often ask health questions or about risk factors during the underwriting period.

Age also significantly affects how much you'll pay for coverage. Generally, the older you, the policyholder, are, the higher you'll have to pay in policy premiums. The likelihood of passing away increases as you age, and consequently, the higher the probability your life insurance company has to pay your beneficiaries your death benefit.

Getting a life insurance policy at every age

If you're not sure if you're too young to buy life insurance or if your age precludes you from it, these are a few things you should consider before purchasing a policy.

Young adult life insurance

Being a young adult is an exciting phase. You may be venturing into a new career or starting a family. Whatever the case, your 20s and 30s are an excellent time to consider applying for life insurance. 

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Pros:

  • Affordable policy: As a young adult, the likelihood that you have severe health issues is low. Life insurance companies also view you as less of a liability in your 20s and 30s because you have a longer life expectancy than those who are middle-aged or seniors so the average cost will be lower. 

  • Build cash value: You'll have more time to grow your cash value which you can use for emergencies, paying off your mortgage or supplementing your retirement income.   

  • Death benefit coverage: If you have a family, a life insurance plan can offer you peace of mind that your policy will financially protect them after you pass away. 

Cons:

  • Extra expense: As a young adult, your income may be lower as you start your career. Therefore, it may not be worth spending on insurance when you have other bills to pay for, especially when you don't need the coverage. 

  • Low return on investment: Cash value growth in an insurance policy is marginal compared to other investment vehicles. 

Middle-age life insurance coverage

Your 40s or 50s can be a crucial time to consider coverage. Life insurance is still relatively affordable at this stage, so you might want to purchase insurance before your premiums skyrocket.

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Pros:

  • It may be inexpensive: If you're in excellent health and are a non-smoker, your premiums remain low. 

  • Financial protection: You may have kids, a spouse or a business with employees that rely on your income. If that's the case, the payout from your policy will take care of your dependents when you pass away. 

  • Leave a legacy: You can use life insurance to build a tax-free inheritance and ensure your children are financially secure for the rest of their lives. 

Cons:

  • It may be expensive: If you have health issues or engage in risky activities, your life insurance policy may be costly. 

  • Low return on investment: Unless you've maxed out on other investment vehicles, you might be better off funding a 401k or Roth IRA for the most consistent and best returns. 

Senior life insurance coverage

If you're in your 60s, 70s and above, you may think it's too late to apply for life insurance. However, you can still qualify and reap the benefits of having coverage as a senior shopper. 

 senior

Pros: 

  • Financial protection: As a senior, it's essential to consider final expenses. Life insurance will cover funeral costs when you pass away, so your family won't have to.  

  • Long-term care benefits: You can tap into your death benefit to supplement your retirement fund. Many providers offer an accelerated death benefit rider for free or at an additional cost to cover your medical bills if you're diagnosed with a terminal or chronic illness. 

Cons: 

  • Expensive premiums: Most companies will charge you hundreds of dollars in monthly premiums if you're older with pre-existing health conditions

  • Policy exclusions: Most insurance companies won't sell a life insurance policy to those over 70. Even if they do, many insurance companies will limit your coverage options. 

Ways to lower your life insurance at any age

Whether you're in your 20s or 60s, life insurance can be a valuable financial tool. However, it can cost a pretty penny, especially if you're an older applicant.

Fortunately, you can take steps to lower your life insurance premiums and still have sufficient coverage by bundling your life insurance with other products or improving your health. You can also compare life insurance quotes from different companies to get the most competitive rates.

FAQS about life insurance at any age

Here are some frequently asked questions about age and life insurance. 

Life insurance companies usually have an age limit; however, it varies by company. If your dependent is under 18, providers offer coverage for children through a child rider.

The age cap for life insurance eligibility varies by company. Most companies won't sell life insurance to those older than 85.

It depends. Many insurance companies offer a medical exam waiver for specific policies and health classifications.