What is the Best Age to Buy Life Insurance?

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Around half of the UK population has some form of life insurance that pays out a lump sum in the event of their death, which can be used to replace their income and pay off the mortgage, or at least cover the cost of a funeral.

Life insurance can be a complicated subject, with many factors to consider when taking out a policy. One of the most common questions we hear from customers is: What is the best age to take out a life insurance policy?

Many personal finance experts recommend that you should buy life insurance before your mid-thirties, as this tends to be the age when the cost of premiums starts to increase rapidly. However, the best time to take out a life insurance policy will differ from person to person, as it depends on the individual's financial and family circumstances.

Below, we explain the different factors that can determine the right time for you to buy life insurance.

Buying younger can get you cheaper premiums

If you buy life insurance at a younger age you will usually qualify for lower premiums, as the older you are the more you are considered a risk to the insurance company as you’re more likely to pass away during the term of the policy.

There are many other factors taken into account when determining your premiums, including your medical history and occupation, but age is definitely a key consideration.

For example, if you buy life insurance in your fifties you can expect to pay twice as much in monthly premiums than if you buy in your twenties. The flip side of this is, if you don’t need to buy life insurance in your 20’s then you may be effectively wasting money on the monthly premiums – regardless of how cheap they are.

This is why it’s important to not focus solely on the ‘best age’ to buy life insurance, and think about when the ‘best time’ to buy life insurance is, i.e. when you first need it.

Reasons to buy life insurance

Buying life insurance when you are young can help you get cheaper premiums and is a good way to plan for the future. However, you may feel it is best to use that money for something else, e.g. to clear your student loan debts, and only take out life insurance when you actually need it.

Life insurance is generally recommended when you have financial dependants and/or significant shared investments – so when you get married, have children or take out a mortgage with your spouse.

Becoming a parent is perhaps the most common time for people to first consider buying life insurance. Term life insurance is a popular choice, as this provides cover for a certain amount of time, such as until your children have grown up and they are no longer depend on your income.

Similarly, people in a couple who take out a mortgage together will often take out a term life insurance policy to provide cover until the mortgage is paid off. That way, if one of them were to unfortunately pass away the other would not be left having to either pay the mortgage off on their own or selling the family home because they can no longer afford it.

Are there age limits to buying life insurance?

While it is possible to find some form of cover even in your 90’s, it is important to not leave it too late to buy life insurance. As well as facing higher premiums when you get older, the cover options available to you may also be limited.

For instance, there are specialist over 50’s life insurance policies available but these tend to be restricted to whole of life policies and the sums insured are usually designed to only cover funeral expenses rather than to support a family.