When you reach your 30s, life is in full swing. If you’re like me, you’ve been in your home for a couple of years, you have new kids on the way, and you’ve enjoyed a few pay raises at your job. You start being more financially conscious about your family’s needs, and term life insurance becomes more of a priority.
If you read the previous posts talking about buying life insurance in your 20s, you’ll see how the thought process can change and it is much different than purchasing life insurance for people over 50. When I bought my first term life insurance policy at the age of 26, I thought $250,000 was more than enough. At the time it was only my wife and me, it definitely was a good amount, but reflecting back I probably should have bought more.
In my 30s, I welcomed the arrival of not only our first son but our second and third as well. After our first son arrived, it was only a matter of weeks before I realized that I needed more life insurance.
The thought of something happening to me and my wife having to not only run the household but also take care of our little son, I knew that I needed more.
I immediately got a quote for a $500,000 30-year term policy that brought my grand total up to $750,000.
The older that you are, the more that you’re going to pay for life insurance. That doesn’t mean that a life insurance policy has to break your bank. Your age isn’t the only factor used to determine premium sizes, there are several things you can control which can lower your rates.
Table of Contents
30 Year-Olds and Life Insurance Amounts – How Do You Compare?
How does this compare to you and your situation? First a couple of things about where we live. We live in the Midwest, so the cost of living is relatively cheap. Our first home was a modest home, and our mortgage was only $109,000. For those of you who live in larger metropolitan areas, I realize it almost sounds like a joke. We had very little debt, so the house was our only major liability. At the time, $750,000 of life insurance coverage was more than ten times my income, so I felt we definitely had enough.
Still, this feeling of security lasted up until we had our second son. We also were in the process of building a new home and having that gut feeling again, I decided I needed more insurance coverage for my family. That’s when I decided to buy an additional term life policy totaling $1.5 million. I kept the other two in force so the total coverage was $2.25 million. Many of you may think that this is excessive and it definitely could be, but as a 30-year-old male who wanted to make sure that his family was more than taken care of if anything happened to him, I felt it was a necessity.
In total, my premiums for all three 30-year term life policies were roughly $2400.
Please note, after a few years I ended up refinancing my life insurance policies and reducing how much I paid.
How Much Do You Need?
There are many different ways you can go about calculating how much life insurance you need.
The first general rule of thumb that many people use is to take 10 times your annual income.
So, if you’re making $60,000 a year, times that by ten and you should have at least a $600,000 term life policy. One point I would like to emphasize in that calculation is that I think that is the bare minimum, so anything less than that and you’re under-covered, but in reality, you should have more. While you’re in your 30s, most likely you will be working at least another 30 years, so making sure you’re covered should be a priority.
Here are a few example quotes of what a 30-year term policy would cost.
| 30 Year $250,000 Term Policy | 30 Year Old | 40 Year Old | 50 Year Old |
|---|---|---|---|
| Male | SBLI $18.92/mo | SBLI $29.36/mo | SBLI $69.17 |
| Female | SBLI $15.66/mo | SBLI $23.49/mo | SBLI $50.68/mo |
If you are looking for a no-exam life insurance policy, here are a few quotes for a 30-year non-medical term policy.
| $250,000 30 Year Term Policy | 30 Year Old | 40 Year Old | 50 Year Old |
|---|---|---|---|
| Fidelity Hybrid | |||
| Male | $24.58/mo | $37.19/mo | $92.00/mo |
| Female | $20.44/mo | $29.58/mo | $66.12/mo |
| Assurity Non-Med | |||
| Male | $34.76/mo | $70.84/mo | $170.06/mo |
| Female | $28.38/mo | $51.04/mo | $110.44/mo |
Other Methods of Calculating
I use a ten times my income calculation as a guideline in my interest calculation, but being a numbers guy I decided to use a slightly different calculation. I figured that if my wife invested the life insurance proceeds money she should be able to average at least 5% interest off her investments. I then also figured that she would need roughly $100,000 a year to take care of the house and her three boys to help out with raising them and helping them all go to college. To get her $100,000 a year if she divided that by 5%, that equals that we would need $2 million invested, and that is how I came up with how much life insurance we needed.
It is not the only way to calculate how much life insurance you’ll need, but it is something that you could use for your own calculations.
Getting Affordable Life Insurance Policies for a 30-Year-Old
Now that you’ve reached your 30s, you can expect to pay more for your life insurance plan than a 20-year-old is going to. We are going to share some of the tried-and-true ways to save money on your plan.
To get started, you need to finally make those hard decisions, mainly about those cigarettes. You have to choose, do you want cheap life insurance or do you want to hang on to those smokes. We promise, you can’t have both. If you keep the cigarettes, you’re getting rates which are double.
There are all ways you can save money, but they are going to take some time. Getting cheap life insurance isn’t quick. One quick and easy decision is to contact one of our independent agents. If you work with us, you’re actually working with 50 different carriers. We have the ability to sell you policies from over 50 of the best companies out there. Making one call can save you hundreds.
Getting term life insurance for a 30-year-old should not be difficult, so don’t make it harder than it needs to be, but if you’re in your 30s and have a young family and you don’t have any life insurance yet, stop procrastinating. Get a free quote today and see how inexpensive it is to make sure that your family is taken care of.
Conclusion
Navigating life insurance in your 30s is crucial, especially when family and financial responsibilities grow. Reflecting on personal experiences, it’s evident that life circumstances such as having children or taking on a mortgage necessitate a reevaluation of insurance coverage. Initially, a $250,000 policy may seem sufficient, but as responsibilities increase, upgrading to a policy that offers more comprehensive coverage becomes imperative.
Opting for a term life insurance policy offers an affordable solution, ensuring financial security for your loved ones. It’s crucial to assess your living situation, liabilities, and income to determine adequate coverage. Despite being in your 30s and facing potentially higher premiums, there are strategies to secure affordable rates. Prioritizing your health, quitting smoking, and choosing the right policy can lead to significant savings. Ultimately, securing life insurance in your 30s is a proactive step towards financial stability, providing peace of mind and safeguarding your family’s future.
Hi Jeff sounds very interesting looking to talking to you soon also on some other invesmemts stuff as well makes alot of sense thanks john!.
Thanks for the response Jeff,
Looking it at it that way, I can see how I could manage a policy. I have a lot to think about and decisions to make.
Agreed. If I had a decent job I could probably swing this. I’m off to bookmark this page for future use…
I agree Loves2teach. There’s no way I could pay that much. I’m barely holding on to my medical coverage. Nice concept, but impossible for me…
@ Anon1 Once again, I’m not advising you to go out and spend $2400 a year on a 2.5$ million 30 year term policy. That’s what I felt my family needed.
Check out this other post https://lifeinsurancebyjeff.com/life-insurance-in-your-30s/ that shows that 30 year old can get a $1 million 30 year term policy for $695 or $57.91 per month.
Even at half that, a $500,000 30 year term policy would cost you less than $30/mo. Point is that most people can’t afford not too. Buying term life insurance should be considered a top priority.
Jeff, my current employer offers coverage up to 3 times my current salary, which is 42,000/year. I want to supplement that, while taking home a decent amount of money after taxes and 401-K deductions. Would your calculation method work for me as a single-father?
@ Stephen Being a single father would maybe decrease the amount you need, but not too much.
A couple of things to consider:
1. That’s great that your employer offers life insurance coverage, but I would encourage you to go buy it outside of there. Most life insurance that you buy through work doesn’t transfer with you if you ever lose your job. If you buy term life insurance from an independent agent, it will follow you wherever you go and you won’t have to take the risk of your next employer having it and/or you having to pass another medical exam.
2. While you’re not leaving income replacement for your spouse, you still want to leave some around to help pay for school and perhaps give them a solid start to their financial lives. Only you would know how much that might be. You will want to make sure you have a will in order too (perhaps a trust) so that your kids wouldn’t get all the lump sum at one time.
Feel free to bounce any more ideas off me.
Jeff, you’ve got to be kidding. In today’s economy how in the world can someone possibly buy this amount of coverage?
People do it all the time.
Keep in mind though that every situation is unique. This is the amount of life insurance coverage that I felt I needed for my family. In your case, it might be far less.
If you know you need the coverage, but can’t afford a 30 year term, you could always take the risk of getting a shorter term, say 20 years, so at least you’re covered for that time frame.