Should I have life insurance in my 30s?

Why get life insurance in your 30s?

Better health

You’re typically in good shape in your 30s. There’s a good chance you’ve left behind the unhealthy habits of your younger years and have settled into better routines with healthy eating and exercise. You’re likely still physically strong and your body is yet to show significant signs of aging. Similarly, you probably have a robust immune system to fight off illness. Locking in a life insurance plan while you’re young and healthy, and likely considered to be low risk by insurers, means you’re more likely to get accepted.

Lower premiums

Insurers base their rates on the assumed risk of insuring you. The older you are, the more likely you are to have health issues. In general, 30-year-olds are lower risk to insure than someone in their 40s or 50s. You’re at a lower risk of age-related heart disease, diabetes and certain types of cancer.¹

These conditions can affect insurability, so securing your insurance early can translate to lower rates. As a bonus, if you lock in low premiums now on a whole life policy, you will likely pay the same amount for the rest of your life.

Early detection of health issues

Regular checkups² in your 30s can help you catch health conditions early before they become bigger problems. Your doctor can identify early warning signs and offer advice to help you minimize the risk of serious disease when you’re older, such as cancers or heart disease.

If you get life insurance now, you may be able to avoid problems older applicants encounter, such as  higher costs and issues getting insured because of pre-existing conditions.

Building cash value in permanent policies

Permanent life insurance may have the option to accumulate cash value during the policy’s span. On most permanent life insurance policies, you will pay part of the premium toward the overall insurance cost, while another part of your payment is allocated to the cash value component.

The cash value earns interest over time and the longer you hold the policy, the more time there is for this interest to grow. It is a great savings tool for financial stability and, subject to the terms of the given policy, you may be able to borrow from it for emergencies, supplementing retirement spending or as loan collateral.

Family history and genetic factors

If you know that hereditary health issues like heart disease and diabetes run in your family, getting life insurance in your 30s may be a good choice. Since these conditions don’t always arise until you’re older, you may get more favourable terms and lower premiums earlier in life.

You can also look at extra options for covering these types of health issues. A critical illness rider can provide additional protection against serious health conditions like cancer, a heart attack or stroke. The rider typically pays out a lump sum if you’re diagnosed with these health issues to cover out-of-pocket expenses or replace lost income.

Life circumstances in your 30s

Starting or growing a family

Whether you have children already or plan to start a family soon, life insurance is arguably a crucial safety net. It can help ensure your children’s financial needs are met in case something happens to you.

Marriage or partnership

Getting married or committing to a long-term partnership often means you combine your finances and share responsibilities. You can use life insurance as a key part of your financial planning. It can help protect your partner from significant income loss if you pass away and help them maintain their standard of living. Additionally, life insurance can help take care of debts or support your retirement nest egg.

Homeownership and mortgages

Buying a home is one of the biggest financial commitments you’ll make. Life insurance can help your family pay off your mortgage if you pass away. This means your family may not need to sell the property or struggle with mortgage payments. The policy proceeds can also help with home maintenance or renovations.

Career advancement and income changes

Climbing the career ladder often means you’ll earn more³, but it can also mean that you decide to commit to bigger financial obligations. You may need to update your life insurance to match these changes and safeguard your family’s future and your ambitions.

Taking care of aging parents

If you’re supporting your elderly parents, your life insurance could be a vital safety net should you pass away before them. If you name them as the beneficiaries, your policy payout can help cover living costs and healthcare needs. Furthermore, they could use the funds to help pay for long-term care service or household adjustments to make their home more accessible. However they choose to spend it, they can enjoy their golden years without financial strain.

Managing debts

Student loans and credit card debt can be stressful, so you don’t want to leave your family in the lurch if you pass away before paying them off. Life insurance can help prevent financial burdens from being passed on by helping to settle any outstanding payments or debts.

What life insurance is best for a 30-year-old?

There are many things to consider when choosing life insurance in your 30s, like:

• Financial situation
• Health
• Lifestyle
• Future goals

Term life insurance may be ideal if you only want a short-term solution until you pay off your mortgage or your kids go off to university. Similarly, you may envision changing your policy in the future, so having a term option can give you more flexibility.

A whole life policy may be better if you want permanent protection with the chance to build cash value. This is especially true if you can afford it now.

Sources

¹ https://www150.statcan.gc.ca/n1/pub/82-570-x/2023001/section1-eng.htm (2023)

² https://www.bcbsm.mibluedaily.com/stories/prevention/health-screenings-you-need-in-your-30s (2024)

³ https://ca.indeed.com/career-advice/pay-salary/average-canadian-salary-by-age (2024)

^TM Foresters and Canada Protection Plan (CPP), and their employees and life insurance representatives, do not provide, on Foresters behalf, financial, estate, legal or tax advice. The information given here is merely a summary of our understanding of current laws and regulations. Clients and prospective purchasers should consult their financial, estate, tax or legal advisor regarding their situation.