Many people think about life insurance only when they get older. But buying it early can save you a lot of money in the long run.
Why Buying Early Costs Less
Life insurance is cheaper when you are young and healthy. For example, a 20-year, $500,000 term life policy might cost around $19 a month for a healthy 30-year-old. The same policy for a healthy 50-year-old could cost about $67 a month.
That difference of $48 a month may not sound like much, but over 20 years, it adds up to about $11,520. So the sooner you buy, the more you save.
How Much Coverage Do You Need?
A simple way to figure this out is the 10x rule. Multiply your yearly income by 10 or 12. If you earn $50,000 a year, you may want about $500,000 to $600,000 in coverage.
Another helpful method is called DIME, which stands for:
- Debt: Any loans or credit cards you still owe
- Income: How many years your family would need your income
- Mortgage: The amount left to pay on your home
- Education: Future school costs for your children
Add these amounts together to get a clear idea of how much coverage you really need.
Term vs. Permanent Life Insurance
There are two main types of life insurance.
- Term insurance lasts for a set period, like 10, 20, or 30 years. It is cheaper and good for protecting your income while you are raising a family or paying off a mortgage.
- Permanent insurance covers you for your whole life and also builds savings. It costs more but can make sense if you want lifelong protection.
A Simple Plan You Can Start Now
- Use the 10x rule or DIME method to decide how much coverage you need.
- Get online quotes for a term policy at your current age.
- Compare what it costs now versus waiting five or ten years.
- If possible, add options that let you increase coverage later even if your health changes.
Buying life insurance early is not just about saving money. It is about giving your loved ones peace of mind and protecting their future in a practical way.