If you are currently thinking about investing in life insurance, the best time is… right now. Unless you are an older adult, very sick, or have no people in your life that rely upon you financially the younger you purchase life insurance, the better your rate will be. You will pay significantly less money now for the same coverage, in comparison to if you waited and bought it when you are older.

When you purchase life insurance, you agree to pay what is called, a premium. A premium is a monthly or annual cost paid to the insurance company, ensuring that your policy will stay in effect. If you fail to keep up with the insurance premiums, then your insurance company will not pay out the death benefit to your loved ones if you pass away. Your premium rate is based upon your medical history which includes any pre-existing health conditions as well as that of your family, and lifestyle choices such as if you are a smoker or you have any dangerous hobbies. Therefore, as you get older, you are more likely to pass away, so insurance companies need to take this into account, resulting in the price increasing.

Buying Young

Your rate is determined when you first sign the policy, and it won’t change during the term of your policy. So, every year that you wait to purchase life insurance, your premium will increase by an average of 8-10% and this percentage raises as you get older.

A life insurance policy is meant to complete your financial plan. The more you save in an individual retirement account or a 401(k) now, the more you will benefit in the future. Investing in life insurance younger, will save you money in the long run and protect your loved ones when you pass.

Whenever you take out life insurance, you are guaranteed to pay the same premium when you take out a policy to when the term comes to an end in 20-30 years. So, a 30-year term life insurance policy that you buy when you are 25 won’t cost you much more if you waited and bought it at the age of 30. However, by age 55, you could be paying $200 or more per month to get the exact same coverage you could have gotten for cheaper if you purchased in your 20s. Why? Because buying when you’re young usually means that you are buying it when you are healthier. Unless you have a chronic medical condition now, any health conditions you develop later in life could mean paying a higher premium.

Buying Older

If you haven’t purchased life insurance yet (and you should), there are times when it makes sense to buy a life insurance policy when you are older. Such as if you are just starting a family later than usual in life, which in our society is common among many millennials who can’t afford to start a family and settle down earlier in life. But this doesn’t mean you should necessarily wait, because the older you get, the more expensive the cost of your premium. If you wait until you are in your 50s, you can expect to pay between three-six times as much per month than if you were in your 20s. However, if you are in your 50s and want to take a new traditional term life insurance policy out you may be able to reduce the term to 10 or 15 years to negotiate a lower premium. If you can’t qualify for term life insurance or you need less coverage than the minimum of $25,000, you do have more options such as final expense insurance. These options are either purchasing a simplified life insurance plan, which allows you to avoid taking a medical exam, but it is more expensive. Or, a guaranteed life insurance plan which is commonly referred to in the industry as a “last resort.” This type of plan has a very high premium and a small death benefit (policies typically max out at $25,000).

What are the key takeaways here? Term life insurance rates increase on average from 8 percent to 10 percent each year you delay buying a policy. Your rates are determined by your health, age, and policy term length and death benefit—that’s why it’s crucial to purchase early on in your life. Lastly, simplified issue life insurance can be a good option if you are an older individual purchasing life insurance later on in life and you can’t find coverage.