Life insurance for adults at every stage
If you think life insurance is only for new parents or middle-aged people, you may be missing out on the best opportunity to buy it. The cost of life insurance when you're young is typically much lower than it will be later in life, so you can generally lock in a better deal.
It’s hard to think about unpleasant future circumstances but putting life insurance into perspective – no matter what stage of “adulting” you’re in – doesn’t have to be painful. We’ve put together this guide to help answer some questions you may have including:
What are the different types of life insurance policies?
Why is coverage important for me?
How much should I get?
When should I buy a policy?
Life insurance can help in almost every phase of life
Life insurance is a way to protect your family and those who depend on you for financial support. It can provide a large, income tax-free payout to help them carry on if you pass away unexpectedly, even at an early age.1 And if you go on to live a nice long life, certain types of life insurance offer the ability to withdraw the cash value of your life insurance policy while you are still alive, as well as features that can help build family assets. Depending on what stage of life you’re in, the benefits and costs of life insurance vary, so you should consider your individual situation before purchasing a life insurance policy.
Use this life insurance calculator to get a quote in minutes.
What are the different types of life insurance?
It's important to understand the two common types of life insurance to determine which may be right for you. These are whole life insurance and term life insurance.
Whole life insurance is a type of permanent life insurance that offers two primary benefits. The first is lifetime coverage: a guaranteed death benefit paid to your loved ones when you pass away – even in 60 or 70 years – as long as the policy is in effect.2 These policies also accumulate cash value over time, so your whole life insurance policy also becomes an asset that you can tap into for things like funding a new business, paying education expenses, or helping to supplement retirement income.3,4
Term life insurance lasts for a limited time, typically between 10 and 30 years. It's very easy to get a term life insurance quote and buy term coverage, and term life insurance rates are typically more cost-effective than whole. But when your coverage term ends, you have to either get a new policy at a higher cost (because you're older) or go without coverage. However, many term policies (such as those from Guardian) may let you convert your coverage to a permanent life insurance policy, at least in the first few years of the policy.
Why do so many adults get life insurance?
If you have loved ones who depend on you for support — financial or otherwise — buying life insurance is one of the best ways to help support their financial well-being.. Even if you don’t have dependents, life insurance can be an important part of your financial wellness. Life insurance can do more than provide income replacement for your dependents — it can be used to help build tax-efficient family assets, help assure the continuity of your business if you pass away, or even pay for final expenses when you pass away, sparing others from that financial burden.
When is the best time to purchase life insurance?
Every individual's situation is different. However, there are a few things to keep in mind:
Young adults are typically in the best position when it comes to buying life insurance since the cost is typically lower than it will be later in life, so you can save money by purchasing a policy early.
People generally consider life insurance during major life events such as getting married, expecting a baby, or buying a new home.
Other life changes that may warrant the purchase of a life insurance policy include taking on the role of caregiver for a spouse, child, or aging parents; finding employment as a gig worker (employed on a temporary, freelance, or part-time basis); or becoming self-employed or starting a small business.
If you are employed by a company that offers benefits, check to see if group life insurance is offered. This will often be the easiest and cheapest way to get this important form of financial protection.
How does life insurance work?
A life insurance policy is a contract between you and an insurance company. You pay a designated amount (monthly, quarterly, or annually) known as the premium. In return, the life insurance company promises to provide a much larger sum – the death benefit – to the people you designate as beneficiaries in the event of your death.
Life insurance benefits are almost always paid out as an income tax-free lump sum and can be quite significant — enough to replace several years of lost income. Whole-life policies also have the added advantage of providing cash value over time, i.e., a tax-efficient asset that you can tap into during your entire life. In addition, permanent life policies can be used for estate planning to help simplify the transfer of generational assets. There can be certain tax benefits as well, but you should always consult with a tax professional before purchasing any type of life insurance for estate planning purposes.
How much life insurance do I need?
How much coverage you need typically depends on where you are in life and how many people rely on your income. The Guardian life insurance calculator can give you a quick estimate of your life insurance cost based on certain assumptions related to your age and income.
In general, the younger you are, the more coverage you'll need to compensate for the years of potential wage-earning ahead of you. And the more people depend on you, the more coverage you may want for income replacement if you die.
Other factors to consider may include your current income and financial obligations, the future needs of your beneficiaries, and any outstanding debts. For example, if you have young dependents or significant debt, you might require more coverage. Ultimately, the best coverage amount is the one that gives you the most reassurance that your family will be taken care of if you're not around to provide that care.
If you have questions about how much or what kind of life insurance to get, it's a good idea to talk with a financial or insurance professional to determine the best type of coverage for your specific situation.
Do I need more than my employer provided life insurance?
Many people have more than one life insurance policy. For example, if you have group life insurance coverage through work, the coverage amount may not meet your life insurance needs—so you can supplement it with an individual policy. Or if you have a whole life insurance policy that provides lifetime coverage and cash value growth, but you're concerned the death benefit may not be enough for your spouse and children, you can get a term life insurance policy with additional protection until your children become adults.
Guardian can help
Everyone’s coverage needs are unique. What kind of policy is exactly right for where you are in life? Sometimes it helps to discuss your situation with a financial professional who has helped others get life insurance protection. If you don't know such a person, ask friends or colleagues for a recommendation. Or, Guardian can connect you to a financial professional who can help.
Frequently asked questions about life insurance needs
It’s any life insurance policy that covers an adult, as opposed to policies that cover minor dependents. Millions of adults have life insurance, and they typically get it to protect the people who depend on them for financial support. A life insurance policy can provide a large, income tax-free payout to help your loved ones carry on if you pass away unexpectedly — and some policies also have features that can help build family assets: Whole life insurance builds cash value while you are still alive, and you can access those funds in a variety of ways. Depending on what stage of life you’re in, the benefits and costs of life insurance vary, so you should consider your individual situation and needs when making a decision to purchase life insurance.
The cost of a $100,000 life insurance policy will vary based on age, smoking status, income, the type of policy, and length of the coverage payout.
However, a recent survey found that the cost of a 10-year, $100,000 term life policy is $7 a month on average for a healthy, 30-year-old nonsmoking woman. This premium goes up to $11 a month on average for a 30-year term policy. 5
Most term policies – and all whole life policies – have "level" rates that stay the same for the length of the term – or, in the case of whole life insurance, for the rest of your life. In other words, once you have one of these policies, the rate is guaranteed not to go up with age. However, rates for a new life insurance policy almost always go up with age, even if the applicant remains in good health. Furthermore, health issues such as high blood pressure or diabetes are more likely to be diagnosed as one gets older, and these can further drive up rates – or, in some cases, make it difficult to get certain kinds of coverage altogether.
Whether you’re buying a term policy for 20 years or a whole life policy for lifelong coverage, you can save significantly by getting a policy when you’re young. And with many whole life policies you may be able to add more coverage as you go through life stages — without having to provide proof of health through a medical exam.