Life Insurance for 30-Year-Olds [2024]

For many, your 30s are all about milestones like marriage, a new home, and starting a family. Even if you’re untethered, you might have some other important familial responsibilities on your plate.

While you’re grateful to have left behind the insecurities of your 20s, and tackling the new challenges of your third decade, don’t forget to do one more thing — buy life insurance. There are many types of life insurance, and we’ll provide an overview.

Before you roll your eyes and click away to visit your favorite subreddit, here’s why buying a term life policy in your 30s is a smart idea.

Why Do 30-Year-Olds Need Life Insurance?

For most 30-somethings, life insurance is a must-have.

A common misconception is that life insurance is burial insurance, just for funeral costs. That’s true if you only get enough coverage for that, but being young and healthy has its advantages, like paying less for more (but we’ll get to that later).

If you’re in your 30s and any of the following apply to you, you probably need life insurance.

1. People Depend on You

The most obvious reason to have a life insurance policy is to make sure your family is taken care of should you pass away. On average, it costs $233,610 to raise one child from birth to age 17. Without your income, would your family be able to maintain your current lifestyle without additional financial stress?

While stay-at-home parents may not bring in income, they do provide a lot of support in the household. In fact, Salary.com found that if stay-at-home parents earned a salary, they would be making $162,581 a year! That’s a $5,000 increase from their 2017 calculation.

So while there isn’t a paycheck in the mail for all of the hard work that stay-at-home parents put in, there is substantial value in the work that you. Take that into consideration when determining just how much life insurance you need and use the term life insurance calculator.

But even if you’re unattached, you’re not getting off scot-free. It’s easy to think that if you’re single, no one depends on you. But that’s not exactly true. The millennial generation, moving into their early- and mid-30s now, are stepping up to take care of aging family members.

A study by AARP found that 25% of all family caregivers in the U.S. are millennials. They provide critical support to parents or other relatives who have serious health conditions, spending on average 20 hours per week doing unpaid caretaking duties. What would they do without you?

While it may be scary to think about all of these scenarios, you can take steps today to provide financial support if the d-word happens while you have people depending on you for support.

2. You Have Debt

The other d-word, debt, is also a motivator for many 30-year-olds looking for term life coverage (and should probably be a motivator for many more). Though some millennials are high earners, many are still faced with debt caused by:

• Mortgage
• Auto loan
• Personal loan
• Credit cards
• Student loans

Mortgages and cars are often at the forefront of these financial decisions, but it’s worth considering how other unsecured debt may be affected if you were to pass away.

In most cases, your estate will not be responsible for any debt in your name. However, don’t forget about co-borrowers or co-signers; they could be on the hook for your debt… especially when it comes to student loans.

While some student loan issuers discharge the remaining balance after the borrower has died, private loans typically do not. So, if a parent or other relative cosigned your six-figure student loan for law school, they could be responsible for the remaining balance.

Are beneficiaries responsible for the debts of the deceased? For some debts, they are. Life insurance can provide a means to pay those debts.

3. You Own a Business

Getting a small business loan? Your bank may require a life insurance policy.

The Small Business Administration (SBA) is not a lender. They work with banks and other lenders to provide government-backed small business loans to small business owners. This helps reduce risk for banks issuing out the loans and helps more people kick off their business venture.

The problem is, the risk is still there, just not entirely with the bank anymore. The government holds that risk. Not good considering that 20 percent of small businesses fail in their first year (and the stats get worse over time).

So, in return for funding your business, you may be asked to purchase a life insurance policy with a collateral assignment of life insurance, making the lender the primary beneficiary on that policy.

There are other considerations when it comes to getting life insurance for business loans, so talk to a licensed agent to make sure you’re getting the right product.

Why is Term Life Insurance in Your 30s So Affordable?

There are several factors that determine how much you’ll pay for a life insurance policy, but a major one that pays in your favor is your age. To find out more, see life insurance rates by age & gender.

In your 30s, you’re likely in great health and have a longer life expectancy. Therefore, you’re considered lower risk than someone in their 40s or 50s. Take a look at the table below.

Term Life Insurance Quotes by Age*

*Quotes are monthly and are based on a Preferred health rating class for $500,000 in 20-year term life coverage without a medical exam.

As you can see, the older you are when you buy a term life policy, the more you’ll pay. But there are many variables, so it’s best to get a term life insurance quote to get a better estimate of how much you might be paying.

Another big reason why term life is so inexpensive is it doesn’t build value like a cash value life insurance policy. Instead of paying monthly premiums, investing them, and waiting for the value to accumulate over time, you simply pay a set monthly premium now, for a set amount of coverage, for a set period of time (available terms are 10, 15, 20, 25, 30, 35, or 40 years).

So, if you buy a $500,000 policy with a 20-year term for $20.31 per month, that is the same amount you’ll pay for those 20 years until the term expires. No, it doesn’t build cash value over those two decades, but that’s what makes it affordable. Cash value policies can be several times more expensive per month. And if you really want to get money back after the term ends, you can always look into getting a Return of Premium (ROP) policy.

Fortunately, applying for term life insurance coverage is easy to do online. You also have the option to apply for a policy with or without a medical exam.

Read more: Life Insurance for Parents 

Term Life Coverage in Your 30s is Smart

Being a 30-something means a whole lot of responsibilities and probably a lot of debt, too. But taking a moment to take on this must-do now can save you a lot of money for decades to come.

Photo by Daiga Ellaby on Unsplash

Case Studies: Life Insurance for 30-Year-Olds

Case Study 1: Family Protection and Debt Coverage

Jessica, a 30-year-old married woman with two young children, decided to purchase life insurance to provide financial protection for her family. She recognized the importance of ensuring that her spouse and children would be taken care of in the event of her untimely death.

Jessica opted for a term life insurance policy with coverage equal to 10 times her annual income, taking into account future expenses such as mortgage payments, education costs, and daily living expenses. By securing life insurance in her 30s, Jessica obtained peace of mind and a sense of security for her family’s future.

Case Study 2: Business Owner’s Financial Responsibility

Michael, a 32-year-old entrepreneur who recently started his own business, understood the importance of having life insurance to safeguard his business and financial obligations. As a small business owner, Michael had taken out a business loan, and the lender required him to have a life insurance policy with a collateral assignment.

Michael chose a term life insurance policy that would cover the outstanding loan amount, ensuring that his business would not be burdened with debt in the event of his passing. This proactive approach provided Michael with the confidence to pursue his entrepreneurial dreams while protecting his business’s financial interests.

Case Study 3: Single With Aging Family Members

Emily, a 35-year-old single woman, recognized the responsibility she had as a caregiver for her aging parents. She wanted to ensure that her parents would be financially supported and provided for if something were to happen to her.

Emily decided to purchase life insurance to secure her parents’ well-being, considering their ongoing medical expenses and the support she provided as their primary caregiver. By obtaining life insurance coverage, Emily ensured that her parents would have the financial resources.