There’s no rule on when someone should buy life insurance, but as with saving and investing, there’s a strong case to be made for starting young.

Many people in their 20s and 30s may not think they need a life insurance policy, but it may be an opportune time to lock in a great rate. No matter your age, here’s how you can tell the right time to buy life insurance.

Assess Your Financial Situation

Whether you’re 20 or 50, deciding whether to buy life insurance depends on your financial situation. Specifically, if someone would be financially impacted by your death, having life insurance in place can be a smart move to help support that person.

For example, someone who has a joint mortgage, car loan, or credit card debt could choose to take out a life insurance policy to ensure their co-borrower can cover those debts if something unexpected happens.

On the other hand, someone in their 20s, single, and debt-free could wait to purchase life insurance until a financial need arises. But it’s worth keeping in mind that rates increase as you get older, so sometimes buying a policy before the financial need arises can end up saving you money.

Figure Out Who Life Insurance Will Benefit

Often, young single people don’t feel they need to purchase a life insurance policy. But as life changes and people get married and have children, there’s suddenly someone who may be in financial trouble if you were to pass away.

Before applying for a policy, consider who you’ll assign as the beneficiary (or beneficiaries). Then, determine how large of a policy you’ll need to support those people and how long it will need to last. For a new parent in their 30s, a 30-year term life insurance policy can be a predictable option that will last until the kids are grown and graduated from college. At that point, the parents can decide if they need to continue coverage or if their financial situation has changed to the point that it’s now unnecessary.

Benefits of Buying Life Insurance Young

Applicants tend to get the most favorable life insurance rates when applying in their 20s. That’s because many people tend to be healthiest during this time, which means a young applicant can lock in a term life insurance policy for a 20- or 30-year term at a lower rate.

For whole life insurance, the benefits of buying a policy young can be even greater, as you can lock in a permanent death benefit as well as have more time to accrue cash value. That’s part of the reason whole life insurance is often the right choice when buying life insurance for a child.

As people age, medical conditions tend to crop up, which can result in a higher policy premium or even exclusion from some types of life insurance. That’s why buying the same policy at age 25 and 45 will result in dramatically different rates.

The Bottom Line

There’s no set age that makes the most sense to purchase a life insurance policy. When you need a policy depends more on your financial situation, including who depends on you for financial support and the amount of debt someone would have to cover in your absence. Using these as a guideline, many people find that applying for life insurance in their 20s or 30s makes the most sense and often results in the lowest possible rates.

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