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[Prefer to listen? You can find a podcast version of this article here: E272: When Should I Get Life Insurance?]

Life insurance can feel like one of those financial products that people think they’ll "get around to eventually." But waiting until later often means higher costs or even the possibility of not qualifying at all.

So when should you get life insurance?

What Is Life Insurance Really For?

At its core, life insurance is designed to provide financial continuity to loved ones in the event of your death. It replaces the income you would have earned, helping survivors maintain some stability while adjusting to a major change.

Contrary to popular belief, life insurance is not just about covering funeral & burial expenses. Rather, it’s a safety net for those who rely on your income to cover essential needs such as:

• Housing
• Education costs for children
• Debt payments
• Everyday living expenses

Without life insurance, these expenses can become overwhelming for survivors. With life insurance, those same loved ones have a bridge to help them grieve without financial disruption.

Does Someone Financially Depend on You?

The right time to get life insurance isn’t defined by an age number; it’s defined by responsibility. If you have people in your life who rely on your financial support (or you expect to in the future – more on that later), that’s the signal.

Some common scenarios include:

• Young parents: Children rely entirely on their parents for financial stability. Life insurance ensures they can remain in the same school, stay in the same home, and continue extracurricular activities if something happens to one parent.
• Married or partnered couples: Even if both work, many households rely on both incomes to cover expenses. If one income disappears, the surviving partner may face financial hardship.
• Care for aging parents or siblings: If you provide financial support for family members, life insurance ensures that care continues even if you’re no longer here to provide it.

Why You Shouldn’t Rely on Employer-Sponsored Life Insurance

It’s common for employers to provide some level of life insurance as part of a benefits package. This is often seen as a nice perk, but it generally should not be the foundation of your protection.

There are two primary issues with employer-sponsored life insurance:

1. The Coverage Amount Is Too Low

Most workplace policies are capped at 1x to 3x your annual salary. While that might sound like a lot, it often falls far short of what’s needed to cover long-term expenses for dependents.

Consider:

• A $150,000 salary with a 2x benefit equals $300,000 of coverage.
• If that survivor needs $100,000 per year to live on, your policy only provides about three years of breathing room (without accounting for inflation).

That’s not nearly enough time to cover children through adulthood, pay off major debts, or secure lasting stability.

2. Coverage Ends When You Leave the Job

Perhaps the bigger risk is that workplace life insurance doesn’t follow you when you leave your employer. If you switch jobs, are laid off, or decide to start a business, the policy generally disappears.

In some cases, you may be able to convert your employer policy into a private policy, but the premiums could be much higher. And the problem of low coverage still exists.

If you wait until that point to apply for private coverage, you may be older or experiencing health conditions that make it far more expensive (or impossible) to secure meaningful protection.

Private policies are better because:

• They stay with you no matter where you work.
• You have control over the coverage amount.
• You lock in pricing while you’re young and healthy.

Why You Should Buy Life Insurance Young

One of the most common mistakes people make is waiting until they “settle down” to look into life insurance. But premiums are heavily tied to two things: age and health.

That means procrastination gets expensive.

40% of insured individuals wish they had purchased their policies at a younger age, as reported by Policygenius. Why?

Premiums Rise With Age

A 30-year-old in good health can often secure a 20-year term policy for hundreds less per year than a 40-year-old. Multiply that cost difference over decades, and waiting just five or ten years could mean paying thousands more for the exact same benefit.

Health Conditions Can Disqualify You

As you age, your risk of developing health issues increases. High blood pressure, diabetes, or sleep apnea (all common conditions as people move into middle age) can make coverage more expensive or create exclusions. In some cases, it may even disqualify you altogether.

The healthiest and most cost-effective time to secure coverage is when you’re younger, often in your 20s or 30s, even if you don’t yet have children. That way, your policy is in place and affordable once big responsibilities arrive.

How Much Life Insurance Do You Really Need?

The ideal amount of coverage depends on your unique circumstances, but here are some guidelines to think about.

Income Replacement

The most straightforward approach is to replace your income for as long as your dependents will need it. If you earn $120,000 annually and want survivors covered for 10–15 years, that suggests $1.2–$1.8 million of coverage.

One common scenario is to plan to invest the proceeds, which could generate income for a longer period of time. There are a few different ways to create an income from a lump sum.

Debt and Major Expenses

Factor in mortgages, student loans, or other major financial obligations. Many families also include funding for college for children as part of their planning.

Existing Assets

If you already have investments or savings that could support your family, you may need less coverage. The goal is to fill the financial gap your absence would leave behind, not to generate excess.

You'll want to determine a more specific number based on your situation. But in most cases, workplace life insurance isn’t nearly enough.

Common Life Insurance Myths

Because life insurance feels like a "someday" purchase, a lot of myths cloud people’s decision-making. Let’s clear up a few.

Myth 1: I don’t need it if I’m single.

Not always true. If you carry debt (like student loans where a cosigner is liable) or support family members, life insurance can protect them.

And if you think you might have a spouse or partner, have children, or need to take care of aging parents someday, you will want life insurance at that point, which goes back to the earlier point about locking in life insurance early when you're young.

Myth 2: I can wait until I have kids.

Buying young locks in better rates. If children are in your future, getting coverage early helps reduce long-term costs.

Myth 3: Life insurance is too expensive.

In reality, term life insurance (especially for younger, healthy applicants) can cost less per month than ordering takeout once. The protection it provides is outsized compared to the cost.

Term vs. Permanent Life Insurance

When shopping for life insurance, you’ll encounter two broad categories:

• Term life insurance: Provides coverage for a set period (10, 20, or 30 years). It’s simple, affordable, and often recommended for income protection.
• Permanent life insurance (such as whole life or universal life): Provides lifelong coverage and may build cash value. These policies are usually more expensive and serve specific planning purposes beyond income replacement.

For most people seeking pure protection, term life insurance is the best place to start. Permanent insurance strategies are best explored with professional guidance, especially for estate planning or specialized scenarios.

So, When Should You Get Life Insurance?

The best time is before you need it.

If anyone depends financially on you, whether it’s young children, a spouse, or even aging parents, you should act now. Waiting only increases your costs and introduces risks that could leave your family unprotected.

And remember: relying on life insurance from your job isn’t enough. It generally disappears when you switch employers and typically doesn’t cover the true financial needs of your dependents.

Buying life insurance sooner locks in affordability, ensures availability, and most importantly, provides your loved ones with protection.

Life insurance isn’t about you, it’s about the people who count on you. It’s about ensuring that if the worst happens, the people you love have the resources to survive and rebuild.

The right time to buy life insurance is now: before health issues arise, before it gets more expensive, and before life adds even more responsibilities to your plate.

If you’ve been putting this decision off, take this as a reminder: love and responsibility show up in action. Getting life insurance means making sure your loved ones (or future loved ones) are taken care of, no matter what happens.