Many couples first seriously consider life insurance in their mid-thirties.
You are old enough now to know that unexpected tragedy is a reality you want to be prepared for.
Building a future for your family is the most important thing you do and you want to make certain that the future you envision for your loved ones will be true even if the worst were to happen to you. Life insurance at 35 is a good decision for your family and your finances.
At age 35, you will still be getting extremely affordable life insurance rates.
You may be surprised at how little your family budget will be affected when you purchase a life insurance policy. Getting your coverage while you are young and healthy is the smart move. In ten years when you are 45 your premiums will be significantly higher and any health issues will further complicate the matter.
Life insurance is one of the most important purchases that you will ever make for your loved ones. It’s one of the only ways that you can ensure that your family members have the money that they need, even if something tragic were to happen to you.
One of the most common reasons that Americans don’t have life insurance is because they assume that it’s too expensive to fit in their budget, but that couldn’t be further from the truth. There are several ways that you can get affordable coverage to give your family the insurance protection that they need.
In this article we will address some basic questions many clients who are new to life insurance want answered.
- Is Term Life the way to go?
- Why do I need life insurance?
- How much life insurance do I need?
- How much will my life insurance cost?
Each of these questions we will be addressed briefly, giving you a basic understanding of life insurance. Since you are reading this, you are probably ready to start the process.
Ogletree Financial Services can help you step-by-step through the application process. We have access to over 60 life insurance companies and know which company will underwrite your risk most favorably to get you the best deal on the life insurance coverage you and your family need.
Why do I need life insurance at 35?
This is the first and most obvious question. Why do I need life insurance? Well, the purpose of life insurance is to make sure that people who rely on you financially will not be burdened by this loss in addition to the obvious, if you were to pass unexpectedly. Would your family be just fine if you and your income were to suddenly disappear? Probably not. This is why people buy life insurance.
Let’s touch briefly on four of the main reasons we see clients purchasing life insurance.
- income replacement
- college education expense
- mortgages and other large debts
- partners in a small business
Income replacement is the main reason most clients purchase term life insurance policies. This policy would provide your loved ones with a cash payout upon your death that would allow them to continue with the standard of living and quality of life you have worked hard for them to enjoy.
College education expense is a cost many parents proudly expect to bear for their children. Therefore, many clients include their children’s higher education when calculating a death benefit for a term life insurance policy. Even if the worst were to happen, you want to make sure your children will experience this valuable transition to adulthood.
If you are considering buying a home, a life insurance policy to cover a mortgage is something you want to consider. Already grieving, you don’t want your loved ones to also be saddled with any financial burdens, including a large debt. A large debt that could result in years of financial hardship on top of a devastating family loss.
One other common use of a life insurance policy is for partners of a small business. In this case it is actually two policies that the partners would take out on each other. If one partner dies unexpectedly, the other partner’s policy would pay them a benefit that would allow them buy out the deceased partner’s interest in the business. This could be the difference between a small business continuing to thrive or closing up shop.
How much life insurance do I need at age 35?
Well, without sitting down with a qualified independent agent, it is hard to say. Each client we see has a unique set of circumstances, no two will have the same life insurance demands.
As far as life insurance to cover college education expenses go, the range is large. Will your child be going to a local school or an Ivy League school? Will you be paying for all expenses or just tuition and books? Don’t forget that the price tag for your child’s future college education will almost certainly be significantly higher than today’s.
The death benefit on a life insurance policy to cover your mortgage would of course depend on the size of your mortgage. Many insurance companies offer mortgage protection policies. We advise that you lump this in with your regular term life insurance policy to save money.
As far as a small-business policy is concerned, life insurance is often used to fund a buy-sell agreement which is a legally binding document that dictates how things will proceed if a partner were to die or a business were to otherwise dissolve. The face value of these policies will of course vary from business to business.
Let’s look now at a simple way to calculate the level of life insurance benefit you would need to replace the income you represent to your household. You need to first decide, if you were to die, how much income would your family require to continue in the standard of living to which they are accustomed? Each family represents a unique set of circumstances and this is something you will decide guided by the advice your independent agent.
For the purposes of this example we will say you make $70,000 a year and have concluded that your family would need an extra income of $35,000 a year to continue their present quality of life in the event of your death.
Imagine a very conservative interest rate that you feel confident a lump sum bequeathed to your family could earn. we’ll go with 4%. Now divide the yearly income you would like your family to receive in the event of your passing by the decimal equivalent of our 4% interest rate, 0.04.
$35,000 ÷ 0.04 = $875,000
So, assuming an interest rate of 4%, you would need a death benefit of $875,000 to ensure your family a yearly income of $35,000. This does not account for inflation, which you will want to account for in your death benefit calculations.
How Much will my Life Insurance Cost 35?
Probably not as much as you think. Especially at 35, you should have no trouble fitting a life insurance premium into even a tight family budget.
Following we have set up four tables with some sample monthly life insurance premiums for a non-smoking, 35-year-old male and female. The quoted figures are for term life insurance. One chart is for a preferred plus health category and one chart is presented for a standard health category.
Life insurance companies evaluate, or underwrite, a client’s risk and then place them into a particular health category based on this evaluation. Sometimes this is called a risk rating, a health rating or risk category. Some people are considered a better risk to live a long life than others and these categories (and the premiums charged to clients placed into them) represent that consideration.
| Male Age 35 Preferred Plus Rates | ||||
| $100,000 | $250,000 | $500,000 | $1,000,000 | |
| 10-year term | $7 | $9 | $13 | $18 |
| 20-year term | $9 | $13 | $21 | $33 |
| 30 year term | $12 | $21 | $34 | $64 |
| Term to age 95 | $50 | $98 | $188 | $351 |
| Male Age 35 Standard Rates | ||||
| $100,000 | $250,000 | $500,000 | $1,000,000 | |
| 10-year term | $10 | $16 | $26 | $44 |
| 20-year term | $14 | $23 | $39 | $72 |
| 30 year term | $21 | $37 | $68 | $127 |
| Term to age 95 | $54 | $129 | $242 | $451 |
| Female Age 35 Preferred Plus Rates | ||||
| $100,000 | $250,000 | $500,000 | $1,000,000 | |
| 10-year term | $7 | $9 | $11 | $15 |
| 20-year term | $8 | $12 | $17 | $28 |
| 30 year term | $11 | $18 | $29 | $51 |
| Term to age 95 | $44 | $78 | $144 | $268 |
| Female Age 35 Standard Rates | ||||
| $100,000 | $250,000 | $500,000 | $1,000,000 | |
| 10-year term | $10 | $14 | $21 | $36 |
| 20-year term | $12 | $19 | $31 | $56 |
| 30 year term | $17 | $30 | $52 | $99 |
| Term to age 95 | $48 | $108 | $203 | $387 |
You should now have an idea of the range of premiums a thirty-five-year-old can expect to pay for a fully-underwritten term life insurance policy.
Life Insurance at 35
That should be enough to get you started and ready to start the buying process. You probably have questions and we can answer them.
You never know what’s going to happen tomorrow, you shouldn’t wait any longer to get the insurance coverage that your family deserves. Use the quoter on this page to get started.
Frequently Asked Questions
Why do I need life insurance at age 35?
Why do I need life insurance? Well, the purpose of life insurance is to make sure that people who rely on you financially will not be burdened by this loss in addition to the obvious, if you were to pass unexpectedly. Would your family be just fine if you and your income were to suddenly disappear? Probably not. This is why people buy life insurance.
How much does life insurance cost at age 35?
A sample monthly premium for a $1,000,000 30-year term policy at a standard rating is $114.39 for a female and $142.20 for a male. Your premium would be determined by your personal underwriting. Consult an independent life insurance agent to get your best rate!
How much life insurance do I need at age 35?
The answer to this question depends on your personal financial situation and the dependents that would be left behind in the event of your death. Some questions to consider when determining how much life insurance to purchase are: do you have a mortgage? do you have children that plan to attend college? do you have debt that would need to be paid off? An independent life insurance agent can help you determine an appropriate amount for your needs.
