Should Your Age Impact the Amount of Life Insurance You Get?

The quick answer? It should.

If you have people in your life who depend on you financially, or who might get hurt financially in your absence, then it pays to put a life insurance policy in place. That way, if something happens to you, you won't end up leaving those important people in the lurch.

A lot of people wind up applying for life insurance in their 30s, since that's a common period of life to have kids. But you may end up applying for life insurance in your 20s, 40s, or even 50s.

The question is: Should your age affect the amount of life insurance coverage you get?

Take your age into account

Your goal in buying life insurance should be to provide your loved ones with enough money to sustain themselves financially in your absence. But your age might dictate the number of years you're looking to provide coverage.

Let's say you're married with no kids and you're in your 40s. You may want to put a 20-year term life insurance policy in place so your spouse is protected until they reach retirement age.

If you earn $80,000 a year, you may decide you want your life insurance policy to offer a high enough benefit to replace your salary 20 times over, leaving your spouse with $1.6 million. But that number might look different if you were to apply at a younger or older age. (For example, if you only had to provide your spouse with a benefit to cover 10 years of your salary, you'd be looking at $800,000 in life insurance.)

Your age could determine your insurance costs

Just as you should account for your age when deciding how much life insurance to buy, so too might your age dictate how much your coverage costs you. Generally speaking, the older you are when you apply for life insurance, the higher your premium costs will be.

For one thing, as people age, their health tends to decline. You might weigh more in your 40s than in your 20s or 30s. But a higher weight could lead to higher premium costs because your life insurance company might assume it's taking on a higher risk.

What's more, if you apply for coverage when you're on the older side, your insurer might assume it's more likely to have to pay out your death benefit. And so you might face higher premium costs for that reason alone.

This isn't to say you shouldn't apply for life insurance when you're on the older side. You might have people in your life you want to protect, and that's an essential thing to do. However, don't be surprised if the amount of money you're charged for life insurance at, say, age 45 is a lot higher than what someone in their mid-30s is charged.

At the same time, shopping around for life insurance could result in lower premium costs. So no matter what age you're applying for insurance at, talk to different companies and compare quotes before signing up. A little research on your part could result in a fair amount of savings.