A simples guide

At what age should I consider taking out life insurance?

As a young adult, it might be a good idea to start thinking about whether you need life insurance now. If you don’t have a family, mortgage, debts or dependents then it might not be something you need. However if you do then it’s something you may want to consider to ensure your loved ones are taken care of if the worst should happen to you.

Fortunately, whatever you take out life insurance for, as a young person your premium could be lower than if you took it our later in life because you’re more likely to be healthier and a lower risk to insurers at the time of setting up your policy. It’s something you should think about sooner rather than later.

But you could need life insurance at any age – so what are your options?

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What if I didn’t purchase life insurance when I was younger?

There can be significant cost benefits to buying insurance when you are young. Also bear in mind that the worst can happen at any age.

However, if you didn’t take out insurance when you were young, don’t worry, you can take out some form of life insurance right up to the age of 85 or so. Just remember to shop around and make sure you get the right cover at the right price for you.

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What might I need insurance for?

You may need life insurance for any of the following reasons:

  • To ensure your family have the funds to continue to live well if the worst were to happen (the need for this cover often ends when your children stop being dependent)
  • To pay off your mortgage or other significant debts to support your loved ones and enable them to stay in your home should the worst happen (you may not need this cover once the debts are cleared)
  • To cover funeral costs (the need for this type of cover never ends, and it helps to think about how your family would pay for your funeral at every stage of your adult life).

What types of life insurance policies are available?

The types of life insurance you can compare with us include:

  • Level term insurance – insurance for a fixed term, say up to 30 years, where a set amount is paid out if the insured person passes away during the term of the policy.
  • Decreasing term insurance – insurance for a fixed term, where the amount that would be paid out reduces over the term of the policy (often associated with repayment mortgages)
  • Over 50s life insurance – this is a bit different, as by this point, you may have paid off your mortgage and instead want your life insurance to pay funeral costs and make sure that you leave your family some money.

Other options you may be interested in are:

  • Family income benefit – insurance for a fixed term, where a set level of income is paid for the remainder of the term of the policy if the insured person were to pass away
  • Whole-of-life assurance – the plan pays out whenever the assured person passes away.

What could it cost?**

Life insurance is based on a number of factors such as your age, your health, whether you’re a smoker or not and as well as things like how much cover you want and how long for. So all of these factors can contribute to the final price you could pay per month. But our data has shown the average price of a premium:

  • For a 20 year old is £8.19 per month.
  • At age 30, the cost rises to £13.75 per month.
  • 40 year olds pay on average £20.52 per month.
  • By age 50, it costs £25.71 per month.
  • At 60, the cost is £31.09 per month.
  • By 70, it costs £74.10 per month.

**Our average life insurance premiums are based on all our customer quotes for each age group stated, covering a mixtures of needs, personal circumstances, types and levels of cover. All average premiums are based on comparethemarket.com data from April 2015 to March 2016 where the customer has clicked through to buy from the life insurance provider. You may find a cheaper or more expensive quote based on your personal circumstances.

What else should I consider?

When buying life insurance, don’t forget:

  • As a smoker, you can expect to pay a higher premium than a non-smoker
  • With the exception of specialist over 50s life insurance, the insurance provider may carry out medical underwriting. Any medical conditions or an unhealthy lifestyle could lead to an increase in your premium
  • If both you and your spouse/partner need life cover, check if it’s cheaper to buy a joint policy rather than two policies in single names. However, do make sure it’s right for you as if one of you does pass away a joint policy will end after one pay out. And in the worst case scenario, if you were both to pass away together, again there would just be one pay-out instead of two – so make sure that this would not leave your family in a difficult position.
  • Do you need critical illness cover as well? For a slightly higher premium, you can arrange for the policy to pay out not only in the event of you passing away, but also if you become seriously ill.
  • Do you have savings or death-in-service at work that could reduce your need for life insurance? It might be worth investigating this before taking out a new policy.

So why not start a quote now and see what it could cost to get the right level of cover for you?

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