Buying Life Insurance in your 30s…

Smartchoice Editorial
June 15, 2021

“It’s not just easier life insurance, it’s an easier life”

Why buying life insurance in your 30s is simpler than you think…

If you’ve been delaying the purchase of life insurance because you think it will be too much of a stress, think again. You can challenge this financial task in 30 minutes or less. So, apply for a life insurance policy, get the required coverage you need and acquire peace of mind knowing that your loved ones will be protected.

To purchase or not to buy life insurance, that is the question that should come to every 30-something’s mind. Right? Ok, maybe we have exaggerated a wee bit regarding the threats and risks. But to be fair, lots of things are there that are needed to be considered if and when deciding to buy life insurance.

To buy or not to buy life insurance, that is the question on every 30-something’s mind. Right?

When the year strikes 30, all of our life changes, the changes can be like buying a home, getting married, starting a family, moving up the career ladder are major motivators. Others are just proactive and want to lock in a low rate sooner rather than later. Whether you’re in the first type, the latter, or just plain confused, we have got you covered. Let’s dig into why you may or may not need life insurance in your thirties.

Do You Really Need Life Insurance at 30?

It depends on the situation you are in, as the answer to a lot of insurance and personal finance questions. Because there’s no one-size-fits-all explanation when it comes to buying life insurance coverage, you need to evaluate what your household’s needs are right now and what they may be in the future.

When you are in your 30s, it can be an ideal time to buy life insurance. As when you are in this age where, if you’re in good and upright health, you’re likely to be able to get affordable life insurance coverage with the right policy. And you’re in all probability at a point in your life where others depend on you financially and you would need a way to replace your income if you were no longer there.

Those are just some of the reasons that buying life insurance in your 30s is often one of the most practical, impactful and affordable times to secure coverage. (Plus, it’s not a coincidence that the average life customer should ideally be in his or her mid-30s.)

Here are some of the smart and practical reasons to buy life insurance in your 30s especially the early 30s, as well as tips for what kind of insurance and how much coverage you might need. Trust us when we say and we are 100% sure that: Your 40-year-old self will thank you for not putting off this important purchase.
1. You have a family now
As an individual in your 30s, one might find themselves buying a house, getting married, or starting a family. One will have plenty of monetary responsibilities that they need to attend to, and at this age, some people likely have people who depend on you financially. If you were to die an anytime accidental or natural death, your loved ones might not be able to pay the bills without your income.

However, you can financially protect your family from your death if you have life insurance. When you buy a policy, you agree with a life insurance provider. You can pay your annual premium broken down into monthly instalments to the insurance provider in return for a payout to the beneficiaries (the “death benefit of the insurance policy”) if the policyholder passes away while the agreement is in place.

The payout from the procured life insurance policy can be used by those individuals you name as your beneficiaries), who may be your partner, kids, designated guardians or even your parents – to help pay for a variety of expenses, including the following:

1. Secured loan or rent
2. Child care costs
3. Groceries
4. Utilities, transportation and other regular expenses
5. Medical bills
6. Other insurance policy premiums

One should think of the policy as a lifeline for their loved ones. Without it, the family likely would struggle financially. A survey conducted by a nonprofit organization Life Happens found that 4 in 10 households without life insurance would have trouble paying living expenses if their primary wage earner died.

An individual can also think of life insurance as a very important first gift to your child. Every parent has hopes and dreams for their children that cost money to make happen. Buying an insurance policy now helps ensure that the family has money to continue to have the funds for those plans. Knowing that the children are protected and safe and will have a life insurance policy payout to put toward things like taking dance classes, going to camp or attending college and universities, even if the wage earner were no longer there, is one way to initiate leaving a legacy for your child.

2. You make more money now

Chances are, you’re making more money in your 30s than you were in your 20s. Your higher income would be difficult to replace if something were to happen to you.
However, a life insurance policy purchased could help replace some of the lost income. Insurance experts often recommend that an individual buy insurance coverage with a death benefit that is equal to five to 10 times the policyholder annual salary. Remember that pay disproportions among women and men can lead to a life insurance gender gap, so this rule of thumb doesn’t always stack up.

To find out how much coverage you need, use an online life insurance calculator for a personalized recommendation.

3. You might owe money, to people/institutions

By the time you’re in your 30s, you likely have debt/mortgage debt, a student loan debt and consumer debt (means credit card debt). When an individual dies, the debt might and usually doesn’t die with the person. It depends on the type of debt and whether there is a co-signer on the credit.
For instance, if you and your partner or spouse took borrowed money together to buy your home, the partner will have to continue paying the secured loan after the death of one partner if he or she stays in the house. Student loan debt can be trickier to deal with.

An international survey of student loan borrowers found that 73% of respondents didn’t know what would happen to their student loans if and when they died. The private student loans taken from a bank or any other institution depends on the lender’s policy. Plus, if you have a co-signer on a private loan, the individual will have to continue making the payments.

If an individual has any debt with co-signers, such as student loans or home loans, it’s significant to consider buying a life insurance policy that can help them pay off those loans. It’s also critical to think about all the other things that the loved ones may be on the hook for if you were to pass away.

4. You could save money by getting life insurance now

Whatever the price may be, nothing compares to the cost of mental peace and serenity. The financial protection an individual can provide for their loved ones makes life insurance worth the cost. As luck would have it, the cost of life insurance can be quite affordable if you buy a policy in your 30s.
The premium you pay for insurance is determined by several factors, including an individual age. Considering that, it’s probably no revelation that you can buy a life insurance policy at a lower insurance premium by getting coverage when you’re young and healthy.
For example, a 30-year-old woman in excellent health can purchase a 30-year long life insurance policy with a PKR 100, 0000 death benefit from any life insurance provider for a predetermined amount per month. If the same woman waits until 40 to buy a life insurance policy, the starting price for the same amount of pay-out and coverage would be many thousands more per month. In other words, your life insurance policy might be more affordable than you think, and it might never be affordable than it is today. Try finding the right policy for people in their 30s in excellent health, you just need to browse and search online to find the right fit.

Life insurance is more affordable than you think

Get your free quote from Smartchoice Now!

5. You could avoid medical hurdles

The health of an individual also plays a big role in your ability to get life insurance coverage and the premium rate a person would pay for it. Healthier adults pay lower rates because they’re considered less risky for the insurance provider. So insurers typically some companies require applicants to go through a medical underwriting process.
For example, when you apply online for a term life insurance policy from Smartchoice, all a person has to do is to fill in the details to answer questions about your personal history and your family health history. The responses will be recorded for further processing of the policy by the insurance provider.

Smartchoice also offers the Term life policy in which some applicants ages 18–59 seeking a lump sum payout up to 1.5 million death benefit or less might meet the criteria that allow them to finalize coverage without a medical exam, based on the information they provided during the application filling process.

An individual can complete an application to find out if they qualify to acquire the life insurance policy. (Keep in mind that it’s always very essential, to be honest in the application filling process. The issuance of the policy or payment of benefits may depend upon the details given in the application and their truthfulness.)

The longer an individual waits to procure a life insurance policy, the greater are the chances that they’ll develop health issues that will result in having the individual pay a higher premium rate for coverage. It will make it harder for an individual to get the desired coverage. So if an individual thinks he/she needs life insurance coverage, lock in an affordable rate while you’re in your 30s and still healthy to get a great premium rate.

6. Your family needs cash for funeral expenses

We understand that life is unpredictable and losing you will be hard enough for your family and dear ones. Well none of us wants to make a bad situation worse by leaving the family on the hook for your funeral and other costs. A funeral, and burial with other expenses like grave cost etc. can easily cost upwards according to the expenses incurred and the rituals followed. A life insurance policy’s death benefit could be used by the family to pay for those costs.
If an individual didn’t have life insurance, the spouse or other immediate family members would need to come up with the cash by any other means to pay these expenses at the same time they’re grieving for the death.

7. You need to protect your business

If you have any business dealings, life insurance can be important for succession planning. Let’s say a person buys and sell real estate for a profit. What would happen if the individual passed away in the middle of a deal? What if the person flipping houses for a profit? How would the family handle the project if the individual passed away during a flip or a major remodelling job?
A family could face similar struggles if the individual runs a small business that buys and holds inventory, has business-related debt or has ongoing business expenses to cover. If an individual buys enough life insurance, on the other hand, one can leave behind enough cash for the family to deal with the business holdings the way the individual would have desired.

8. You’ll have one less thing to worry about

Want something simple to check off the to-do list? Apply for affordable life insurance online. Thanks to modern technology, buying a policy is easier than ever. If you apply for life insurance coverage online and are approved for a policy, your rates are locked in through the specified term length, as long as you continue to pay premiums.
Life insurance for people with a life.

In today’s world, we make and track our budget online. You invest online. Why not apply for your life insurance online? It saves time and hassles both!

Another important question is what kind of life insurance should a 30-year-old buy?

Two types of life insurance are commonly purchased: term and permanent (long term life insurance). Term life insurance provides a simple, affordable way to help financially protect your family for a specific period of time typically available in Pakistan is a period of 1 year. If you die during that period, your insurer will pay a death benefit to your beneficiaries. And you can get this coverage for less than the cost of many everyday expenses.
Permanent life insurance comes in a few varieties the most common being whole and universal life. Unlike term, permanent policies provide coverage for a lifetime and include a cash value component that can grow or decrease over time. These features are why permanent policies can cost anywhere from 5 to 20 times more than a term life policy.
So, which is the right choice for an individual in his or her 30s? That will depend on your budget and what you want from a life insurance policy. For many, though, term life insurance is a good, affordable way to put coverage in place.

How much coverage does a 30-something need?

While individual life insurance needs vary from person to person, one can get a general sense of your coverage needs by taking a closer look at their income. If an individual is earning PKR 12, 00000 per year and wants to replace your income for five to 10 years (a standard recommendation from experts), the person would need a term life insurance policy with a death benefit worth which is 5 to 10 times greater than the said income. If you don’t have any personal income as you’re a stay-at-home parent, that doesn’t mean you don’t need insurance coverage. It needs to understand that if someone is no longer around, the spouse or partner would have to pay for child care and other tasks that were being typically handled by the partner, such as cleaning the home.
So when figuring out how much coverage you need, you should factor in the following:

• Lost income and living expenses, like rent or daily bills
• Debts you leave behind
• Child care if you are a stay-at-home parent
• Funeral, burial, and other final expenses
• college expenses for your children
• Unpaid medical bills or taxes

If a person is a parent, carry considerable debt or own a business, they may need more. Again, a life insurance needs calculator can help an individual to make a sound decision.

Life insurance needs aren’t one-size-fits-all.

Calculate the needs

What’s the best term length for people in their 30s?

In addition to choosing how much coverage you need when buying term life insurance, you need to decide how long you want your policy to last. You want the coverage to be available when your family needs it most. That could mean until your secured loan is paid off or until your kids have graduated from college.
Fortunately, an individual has plenty of options available to you, especially in your 30s. They can buy long term life insurance life cover for 10, 15, 20, or 30 years, depending on the needs of an individual. Shorter-term policies tend to cost less with obvious lesser returns. But saving a few dollars each month on premiums might not be worth it if a person dies shortly after the term is up and the family is left without any kind of cover or protection.
While longer policies tend to cost more each month or year, but they do offer a longer span of coverage that may bring peace of mind during that period.

You’re a great contender for a life insurance policy if one or more of these apply to you by any means:

1. You’re in a Long-Term Relationship

Well, we don’t ask but everyone knows their own situation whether you’re married, in a committed relationship, or prefer not to talk about the relationship status (hey, you do you), but what we are trying to put forward here is if someone has someone who is depending on them financially then a step needs to be taken in the right direction.
A family that is depending on the income of that certain individual. We have often seen families where the whole family depends on the income of one person completely. There are no other cushions or anything just one person to depend on. In this situation having life insurance is very significant. A life insurance policy can provide some financial security for your loved ones. After all, the death, benefit the amount of life insurance coverage obtained is tax-free and the money can be used to pay for any expenses which are necessary for day-to-day life.
Sure, being a Pakistani we do have savings for the rainy day and it can cover expenses, too. But why dip into a rainy day fund or post-retirement account when an affordable life insurance policy can take care of those necessities and more?

2. You Own a Home

Purchasing a home is a gigantic and expensive milestone. Aside from the home loan, there are the costs of sustaining and maintaining the home, additional expenditures, and perhaps even reshaping services after ignoring your flower beds for so long that everybody around you has noticed…
If an individual has a mortgage, a life insurance policy can cover the equilibrium of your loan plus any other expenses to keep a roof over the head of your loved ones’.

3. You Have Other Liabilities

Student loans, car loans, and credit cards — oh my!
According to a survey, 30-something people owe a lot to banks in the form of multiple loans. But that’s not surprising considering this age range also happens to concur with child-rearing years and all of the expenses that come along with it. And even if you don’t have children, you might have some debt from college and university or a business seeding amount. Or maybe you spent a little more on your car than you have cash on hand for.
Whatever the reason for your debt, it doesn’t just go away after you’re gone. Your estate will owe that debt. And if the debt can’t be paid, it could mean selling any assets you may have left to your beneficiaries. And if you have any cosigners, then that debt now becomes their responsibility. Yup, even those student loans your parents signed off on.

4. You Have Children (Or Are Planning on Having Them)

To piggyback on the point above, you’re likely to incur more debt when children are in your household. You get a bigger home, bigger car, want to fund once-in-a-lifetime vacations to theme parks… you get it. So, it’s especially important to protect your family’s financial future if you’d like them to maintain your current lifestyle.
Even if you’re a stay-at-home parent, you have to take into consideration the amount of work that is keeping your household together. Think childcare, cleaning, cooking, chauffeuring, tutoring, and any other thing your children take for granted now but will thank you for it in about 20 years. Who would take care of all that if you were gone? Take all of these things into account as you try to calculate just how much life insurance you need.

Women, if you are pregnant or a new mother, you don’t need to wait to get a policy either. Plan and lock in a low monthly rate now while you’re younger and in great health. You can get a term life policy online without a medical exam, so you don’t need to worry about abnormal lab results from pregnancy hormones impacting how much you’ll pay for coverage.

5. You Want a Good Deal

If you’re into great deals, then listen up. Life insurance in your 30s can be super affordable.
In life insurance underwriting (the process that determines whether you’re eligible for coverage and if eligible, at what cost), your age is a major factor. Generally speaking, the younger and healthier you are, the less you’ll pay in life insurance premium.

Buying life insurance in your 30s is a steal, especially if you’re in the market for a term life policy. You can lock in a low rate for the next decade or two when you and your loved ones are most vulnerable. Meaning, relatively little savings and likely a good amount of debt.

What’s the Best Life Insurance For a 30-Year-Old?

While we can’t call it the best, a simple and affordable option is level term life insurance. Pick a term, coverage amount, and your monthly payment stays the same throughout the duration of your term.
For example, if you lock in a 20-year long life policy with PKR5000, 000 in coverage for PKR a few thousand per month, you’ll pay that amount during that entire 20-year term. And should you pass away and your beneficiaries receive the death benefit, they’ll get that PKR5000, 000 tax-free even if the claim is filed and approved on day 100 or day 7,000.

However, there are many other life insurance products out there. Another popular choice is whole life insurance which you can keep for life. These can be more complicated as they can build up a cash value and can get quite expensive. Just look at the difference between the monthly premium of a term life policy vs a whole life policy.
As you can see, buying a term life policy in your 30s is affordable and customizable. Maybe $500k isn’t the right amount for your needs. That’s fine, just buy more or less. It’s super easy to get, too. You can get quotes and buy coverage online without a medical exam in as little as 5 minutes. You can even do it on your phone.

So, if none of these applies to you, maybe now isn’t the right time. For everyone else…
Being responsible isn’t always fun but it is rewarding. And hey, if you knock out this task now, you can rest easy for the next decade or more.

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