The Best Life Insurance Policy for a 30 Year Old Is VERY Affordable!
The Best Life Insurance Policy for a 30 Year Old is SUPER affordable ladies and gentleman. This is a great time to buy life insurance coverage.
Because it’s likely that you’re fit and healthy – which means life insurance companies give you preferential rates.
If you’re raising a family life insurance is a no brainer. It provides a financial safety net just in case a tragic scenario unfolds.
Sure we all want to believe we’re superhuman, but the fact is we’re all going to die. It’s just a question of time. So why not buy life insurance while the going is good?
30 somethings considering life insurance read on! This is the post for you.
VERY Reasonable Life Insurance Rates Ages 30 - 39
The Best Life Insurance Policy for a 30 Year Old is incredibly affordable. Yes indeed! This is because the cost of your premiums, the payments you make to the insurer, are based on your personal circumstances.
So as you can imagine when you’re in your 30’s your risk of dying is substantially lower than when you are in your 50’s.
Sure there are always exceptions to the rule, but for the most part, young people are healthier.
For the purposes of sharing rates, I’m discussing term life insurance because it’s the most affordable option and suits most people most of the time.
That being said, there are also permanent products that I’ll talk about later in the article.
Basic Term Life Insurance Rates in Your 30's
Now back to term rates. I want to look at the average cost of term life insurance for a 30 year old and up!
Life insurance is a business so companies employ crack underwriters to review the results of your physical exam and questionnaire. They assess the risk the insurer takes on when they provide you with coverage.
If the risk is very low they pass the savings on to you through something called a preferred rating. The more risk the lower the rating and the more you pay.
For the purposed of this article I am using Standard rates because this is the rating most people receive so it provides the most realistic idea of how much you pay:
Wawanesa Life Insurance Rates
Standard Rating, 20 Year Term
|30 Year Old Male||$30.60||$60.30|
|30 Year Old Female||$22.95||$45.00|
|31 Year Old Male||$31.50||$62.10|
|31 Year Old Female||$23.85||$46.80|
|32 Year Old Male||$32.85||$64.80|
|32 Year Old Female||$25.20||$49.50|
|33 Year Old Male||$33.75||$66.60|
|33 Year Old Female||$26.10||$51.30|
|34 Year Old Male||$34.65||$67.50|
|34 Year Old Female||$27.45||$54.00|
|35 Year Old Male||$36.00||$70.20|
|35 Year Old Female||$28.80||$56.70|
|36 Year Old Male||$38.70||$75.60|
|36 Year Old Female||$30.60||$60.30|
|37 Year Old Male||$41.40||$81.00|
|37 Year Old Female||$32.40||$63.90|
|38 Year Old Male||$44.10||$86.40|
|38 Year Old Female||$34.20||$66.60|
|39 Year Old Male||$47.25||$92.70|
|39 Year Old Female||$36.00||$70.20|
|40 Year Old Male||$50.85||$99.90|
|40 Year Old Female||$38.25||$74.70|
*Quotes above are for Wawanesa Life’s 20 year term, monthly, Standard Health Class, non-smoker. Your rates may differ depending on your unique circumstances. July 1 2021.
Sample Term Life Insurance Rates: Affordable Life Insurance 30 - 40 Years Old
Now take a look at those rates. Imagine going to sleep every night knowing that if something happens to you, your family is taken care of. It takes a lot of pressure off.
Don’t get me wrong I know it’s an investment, but when you think of it compared to other expenditures in life it really puts things into perspective.
My wife and I ordered some takeout Thai food for the family last night. The meal set us back about $70.00. Now compare that to $1 Million in coverage for a 36 year old man, which costs about the same. Do you see what I mean?
Hey, and if you’re a woman you pay even less! This is because statistically speaking women live longer than their male counterparts. So a 36 year old non-smoking woman with a standard rating will pay $63.90 with Wawanesa Life Insurance.
Buyer Beware: Rates Start to Take Off In Your 40's
A 30 year old female in average health can get $1 Million in coverage for $45.00 per month for 20 years.
The same coverage for a 40 year old female in similar health would be $74.70 per month.
Difference in premiums over 20 years is $7,128!
You can clearly see the increasing cost as your risk to insure goes up.
Your Health Plays a BIG Role
Your health plays a big role when it comes to getting the best life insurance policy.
This is one of the biggest concerns my clients have when they come to see me. Virtually everyone is worried about their medical exam and what it may reveal.
Well, I am here to tell you that most are VERY uneventful – chances are you are healthier than you think!
People overestimate their aches, pains and simple medical issues. The good news is most clients get by with a standard rating!
Unless you have a serious medical issue people are rarely rated or declined. Of course, everyone has a different situation and there are those that have justified concerns, but I wanted to be the bearer of good news for this article.
Keep Up With Your Health
When it comes to medical conditions, control and time are the keys to getting affordable premiums. For example, if you have elevated cholesterol you won’t be considered high risk if you’ve been treated successfully for 12 months. The same holds true for high blood pressure.
It really can save you a lot of time, money and heartache.
So let’s take a peek at the difference in rates for a standard rating vs preferred rating for a female nonsmoker now! For the purposes of this section I am using RBC!
RBC Life Insurance Term 30:
$500K Coverage for a 38 Year Old Female
BMO Life Insurance Term 30:
$500K Coverage 38 Year Old Female
"Preferred Plus Rating"
So as you can clearly see, the client that is in better shape gets more affordable premiums from RBC.
While it may not look like a lot when you calculate it over a 30 year term the savings s substantial.
$3,985 to be exact.
I don’t know about you but I can think of a lot better ways to spend that money than to send it to RBC
It’s also important for people to be aware that men pay a heck of a lot more – simply for being men. That’s because their lifespan is shorter.
For example a man in standard health at 38 pays $75.06 compared to a woman who pays $56.84.
…..and if you smoke?
Man it’s a hell of a lot more. I’ll leave that for another article.
Some simple advice?
Don’t smoke or start a cessation program if do smoke. It will save you lots of money and your lungs will thank you!
Picking the Right Company
Always work with a knowledgeable independent agent that is familiar with the ever-changing terrain of the underwriting policies of these companies.
Each insurer handles the way they approach medical issues differently. Some are more lenient than others for specific health conditions and this is where you can save a lot of money.
So let’s say the insurer you are considering is really tough on Type 2 Diabetes and you have it…this means you’ll spend a boatload more money than you should if you don’t do your homework.
Some carriers right out of the gate rate a healthy type 2 diabetic at 150%. This means If the standard rate is $50 per month, diabetics pay $75.
There are a few carriers that consistently underwrite type 2 diabetes at standard rates, provided the applicant is healthy and the diabetes is well managed. Wouldn’t you like to work with an agent who knows who these life insurance companies are?
The Best Life Insurance Policy for a 30 Year Old & Up
Why YOU Need Life Insurance
Everyone lives their lives differently. That being said, if you want a family your 30’s is a great time to start. A large percentage of my clients come to me in this decade because it’s when things start to get real.
So what would compel someone in their 30’s to get life insurance? I am going to share the most common situations now:
The Best Life Insurance Policy for a 30 Year Old & Up: Income Replacement & Family
If you are in your 30’s chances are you have a job, some debt and maybe even a mortgage. If you’re married and own a home with your spouse a life insurance policy can protect them in case your income suddenly ceases due to an untimely death.
I think this is something couples often forget about when they move in together.
A dual-income family is a norm these days so it’s important to plan for detrimental situations BEFORE they happen.
Children are another reason to get life insurance coverage. Parents come to see me when they realize how precarious their financial footing is and reach out for some insurance advice.
…but this is not all!
Student Loans: Did Your Parents Cosign Your Debt?
A university or college educations is COSTLY.
If you are lucky enough to go to law or medical school you may require a large loan. Quite often these loans are backed up by family because of a lack of collateral. In your 30’s this debt may or may not be paid off.
If you still have student loans that you’re parents are on the hook for it makes sense to take out some term coverage to be sure they don’t get stuck paying that bill if something unforeseen happens to you.
You see? There are lots of ways life insurance can be used in your 30’s.
“If you want to study at postgraduate level, the tuition fees are generally lower, and again vary depending on your program. Statistics Canada puts the average postgraduate tuition fee at CA$16,497 in 2018/19, which is approximately US$12,500, and only a one percent increase from the previous year. As is the case worldwide, executive MBA programs are generally the most expensive, averaging around CA$49,798 (~US$37,700), while regular MBAs cost CA$30,570 (~US$23,160) on average.”
The Best Life Insurance Policy for a 30 Year Old & Up: Divorce
Marriages aren’t as resilient as they once were. In fact, there is a term “starter” wife/husband that was created because some people marry very young, have children and realize that they are not compatible.
If you have a child with someone and you’re no longer married – a prerequisite of your divorce may be taking out a term policy to cover the loss of alimony or child support in the unlikely event of your early death. This protects the surviving spouse from financial issues that arise.
Even if the partner who dies isn’t providing financial support – time is money. Which means if you have joint custody a lot will change if there is a death.
It gets even more complicated if you have a second family. A life insurance policy may even be used to level out inheritances. But this is typically done with permanent insurance.
The Best Life Insurance Policy for a 30 Year Old & Up: Entrepreneurialism
The world is a really different place today. I remember the days when you picked out a profession, got training, applied for a job with benefits and stayed until you either retired or something better came up.
This isn’t the case now. People switch careers, jump from job to job and start their own companies. It’s an exciting time that lacks some of the security of the past.
Entrepreneurialism is more and more popular because we have the tools to easily set up businesses. So it’s quite possible you own your own company in your 30’s.
If that’s the case, life insurance can protect your partners, employees, and clients from your untimely death. It also assures your business continues even if you aren’t there.
You can depend on one fact. Life changes.
While you may be as fit as a fiddle today, that can and will change. That’s why it’s a great idea to get your foot in the “life insurance door” when you’re young and healthy.
During this period rates are low!
Did you know you can get also get a guaranteed insurability rider added to your coverage? Yep! This allows you to purchase more coverage after your term expires without a medical exam.
So if your health declines you’re not forced to take another medical exam – running the risk of being seriously rated or declined altogether.
Please make sure your policy contains a conversion option which allows you to switch your coverage to permanent insurance without reapplying.
Should You Select Term or Permanent Coverage?
So what’s the best type of life insurance for a 30 year old and up? Well, you need to know there’s a choice. Basically, life insurance consists of two kinds of policies.
For the most part, term coverage is the best option for those of you looking for life insurance in your 30’s.
To sum it up, term insurance is temporary and provides coverage for a specific period of time (ie. 10 or 20 years) to protect your family when they’re most vulnerable.
This typically is put in place as income replacement for those periods when you most need it. Remember, God forbid, if you leave this earth unexpectedly, your income is terminated for good.
Life Insurance 'til the Day You Die
Permanent insurance, on the other hand, protects your family until the day you die and usually has a cash value accumulation feature. This means there’s a guaranteed payout as long as you keep up with your premiums – which compared with term insurance, can be pretty hefty even in your 30’s.
The biggest problem here is making sure your payments don’t fall through the cracks in times of financial uncertainty. Sadly this happens to a lot of people and they lose their shirts.
The type of insurance you select depends on your personal circumstances. For the most part, I find term fits the bill. BUT if you fall into the following categories permanent insurance is a great tool if you:
- have an estate that needs to be protected from excessive tax
- are a high-net-worth individual and your business is a cash cow
- looking for additional tax shelter because you maxed out everything else
- have a business or a child with special needs
- want to cover final expenses
If you think a permanent policy would work wonders for you, give Policy Architects a call today.
How Much Coverage Does a 30 Something Need?
Your 30’s are a complex time. People are waiting longer to have families. So you may be traveling Europe with your friends during the holidays OR maybe you have a smokin’ career and a family.
Everyone is different. The one thing I know for certain – generalizing is a bad idea.
So for the purposes of this article, I’m going to give you a couple of examples to show you just how different things can be.
Case #1 Sophia & Jim
My first client Sophia is living with her boyfriend. They just purchased a house and her parents lent her the money for the painful downpayment on a home in Toronto.
If something happens to Sophia or her partner Jim, her parents can’t afford to lose the money. Always thinking ahead Sophia called me for some life insurance coverage – just in case.
The thing is Jim’s an artist and his income is hit and miss. Sometimes he gets paid a bomb but there’s no guarantee. Sophia on the other hand works for a big bank and makes some good cash.
The home they bought cost $1 Million and they have an $800K mortgage – which means her parents lent her $100K to cover their shortfall for the downpayment and closing costs. How much life insurance does Sophia need?
Sophia Gravely Underestimates Her Needs
When Sophia came to see me she wanted a $100K policy to cover her parents. While I love the way she thinks – she’s seriously off base.
Her income is currently $150K per year and Jim’s contribution is not predictable. For example last year he only made $40K but this year he’s on target for $75k. Sophia wants Jim to be able to stay in the house if she dies but this is impossible without more coverage. She also expects to make in excess of $200K later in her career.
After a needs analysis Sophia realizes that she needs much more coverage. The good news is she’s young and healthy and $2 Million of coverage for 30 years only costs her $133.65 per month!
This is because she is young and received a preferred rating from BMO.
There’s a LOT of variability here that needs to be discussed.
This is Another Reason to Go Independent
This is why calling Policy Architects was a great choice. We have some terrific ideas about Sophia (and you) can save money. For example, layering her coverage is another way to achieve balance. Contact us today to find out what I mean.
Case #2: Graham's Never Having Kids
My next client Graham doesn’t want a family.
He is 39, lives on his own and has no intention of getting married or having kids. He likes having a relationship and is a terrific Uncle but thoroughly enjoys his independence.
Graham makes a lot of money and in fact, his condo is nearly paid off. Hey, he started early. The one thing is he’s concerned about are final expenses.
I like the way Graham thinks. He loves his family and doesn’t want them to have to take this burden on.
A small $20,000, 20 Pay, whole life policy with Equitable Life of Canada only sets him back $34.64 per month. Also if need be, he can access the cash value or borrow against it if he runs into financial issues down the road.
Graham’s policy will be all paid up by age 59 and if he makes it to age 70, the death benefit will likely be $28,000. Not to mention, he will have only paid $8,313.60 into the policy over the 20 years.
Case #3: Charlie & Joan Have Kids, a Mortgage & Debt
At age 36 Charlie is worried about the future of his family. He and his wife Joan got married at 30 and now have 3 kids, a dog, and a $500K mortgage.
Joan, 33, is a stay at home mom. There’s no way his loved ones could stay in the house without his paycheck. Charlie makes about $100K per year and they sure aren’t rolling in it.
He’s concerned that if something happens to him, his family will be utterly destroyed and he’s right.
We do a needs analysis and determine that Charlie requires at least $1 Million of life insurance coverage to achieve his goals. A good, quick rule of thumb – if you have small children, you should have at least 10 times your income in coverage.
You should also have a minimum coverage term of 20 years to protect your family when they’re most vulnerable. Charlie has some medical issues, but they are under control right now.
The good news? We manage to get him $1.5 million of coverage for 20 years, standard non-smoking rate with Empire Life at $97.65 per month.
Underestimating Needs is Common
When Charlie first spoke to me he thought $500K would be more than enough to cover his family. That’s a lot of money but if you do the math, $500k will replace Charlie’s after-tax salary (approx $72k) for approximately 8 years.
Does that buy Joan enough time to continue caring for their kids while transitioning into to the workforce so she can earn enough money to cover their current lifestyle when the insurance proceeds run out? Will there be other expenses? What about college?
When we examined it this way, Charlie realized just how much of a loss his death would be. After reviewing all the outgoings and his vision for the future he now knows that $500,000 leaves him sadly underinsured.
Stay-At-Home Moms Need Life Insurance Too!
But hey, let’s not forget about Joan. What happens if she dies tomorrow with no life insurance? Is Charlie going to suddenly stop working so he can stay home and take care of the kids?
Joan doesn’t earn an income per se but how much would it cost Charlie to pay someone else to do the work she does? One of their children is a pre-schooler and the 2 others are in primary grades.
We often forget, a stay at home parent makes a valuable contribution to the family both socially and economically.
Joan figures a full-time nanny would cost Charlie about $40,000 annually for 10 to 15 years. Averaged out, $500,000 would definitely cover it.
A $500,000, 20 year term policy for Joerage and go with a $1 million policy at $44.10 per month simply because it’s so affordable.
Knowing there won’t be a financial burden oan through Empire Life costs $25.20 per month. But they elect to increase her covn the family if either one of them dies prematurely, provides them with great comfort.
Their total outlay? $137.25 per month combined. It sure doesn’t break the bank at 2% of their net monthly income.
Different Strokes for Different Folks
Well as you can see there are a LOT of different scenarios out there. These examples don’t even scratch the surface. The long and the short of it is – each person has different requirements and that’s why it’s so important to do a needs analysis and meet with an independent life insurance agent.
We go through your medical history, financial situation (present and future) and review your goals. The cool part is this consultation doesn’t cost you a dime.
Call us today! We can help you find the best possible coverage for your needs!
“While just one in 10 Canadians say they’re not getting by financially, another 68 per cent say they “have to think about how they spend money.” And concern over jobs ranks seventh in terms of what worries Canadians”
“the most. It’s easy to understand where those concerns come from. Debt levels remain high. Wages are finally beginning to rise, but growth has been stubbornly low for decades.”
Policy Architects to the Rescue!
So what’s the best policy for a 30 year old (and up)!?
As you can see, there is no one size fits all sort of answer. I think a lot of people want instant pudding.
This explains the rise of automated life insurance. Log in to get the cheapest rates with little or no effort. Sure there are some positive aspects to fast and easy…
..but I will tell you no food company has been able to replicate REAL pudding with the instant variety. What’s missing? Time, effort and the human touch. This is what we offer.
Policy Architects is a boutique life insurance agency. We are real people with real families. Helping you to help your loved ones is our goal. Call us today because we care.