Best for
- Young, healthy adults who'll pay the least they'll ever pay
- New parents and newlyweds whose need just appeared
- Anyone relying solely on employer coverage
Home / Insurance / When Should You Buy Term Life Insurance
Insurance · Updated 2026-10-19
When Should You Buy Term Life Insurance?
Verified Oct 19, 2026There are two best times to buy life insurance, and they're both about the same thing: buy when you're young, and buy when you're healthy — because life insurance costs more as you age and health issues crop up, per AAA Life. Every year you wait, the price goes one direction.
But most people don't buy on a schedule; they buy (or don't) around life events. Here's how timing actually works, the trap that catches most buyers, and why so many people wrongly assume they can't afford it.
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The two best times
When you're young: age is a primary rating factor — typically, the younger you are, the lower your premium. A policy bought at 28 is priced on 28-year-old risk for its whole term.
When you're healthy: health changes can raise premiums or block coverage entirely. Buying while healthy locks in underwriting based on today's health, not whatever the next decade brings.
Both point the same direction: earlier is cheaper, and "later" carries the double risk of higher age-based pricing and new health issues.
The life events that change the math
The NAIC advises reviewing life insurance after: birth, adoption, marriage, job change, death, or divorce. The III's core triggers behind those events: people depending on your income (children, a spouse), debts someone else co-signed, and final expenses that would land on family. If any of those are new since you last thought about insurance, your old answer is stale.
The employer-coverage trap
Many people assume their employer's group life policy has them covered. The NAIC's warning is direct: employer coverage alone is usually insufficient and may not follow you if you leave the job. Group policies are typically a modest multiple of salary — fine as a supplement, dangerous as the whole plan. And the coverage that vanishes exactly when you change jobs is the coverage most likely to vanish at an inconvenient time.
The cost-misperception problem
Here's the most fixable reason people go uninsured: they think it costs far more than it does. Industry research from the LIMRA/Life Happens Barometer (via III reporting) finds consumers — especially younger adults — overestimate term-life costs, in some studies by 10x or more versus actual average premiums for healthy applicants. That misperception is a leading driver of the coverage gap. The irony: the group most likely to overestimate the cost (young adults) is the group that would pay the least. A record-high 39% of consumers said they intend to buy within the next year — 44% of Gen Z and 50% of millennials — per the 2023 Barometer. Intention is cheap; quotes are free.
Don't cancel the old policy before the new one issues
If you're replacing coverage, the NAIC's rule is absolute: don't cancel an existing policy until the new one is issued. Health changes between application and approval can affect your insurability and your premium — canceling first can leave you uninsurable, uninsured, or both. Overlap the policies by a few weeks; the extra premium is trivial insurance against the gap.
The free-look safety net
New policies carry a free-look period — usually 10 days — during which you can return the policy for a full refund if you're not satisfied. That means there's very little risk in applying: you can review the actual issued policy, with its actual premium and terms, and walk away whole if it isn't what you expected. Use the free look to read the exclusions and the conversion language with fresh eyes.
What to do this week
- Run the coverage estimator (DIME method, two minutes).
- Get quotes for identical coverage — same term, same face amount — from several insurers.
- Apply while you're healthy; use the free-look period to review before committing.
- Put a calendar reminder to review after your next life event.
Who it's best for — and who can skip it
You may not need it if
- People with no financial dependents and covered final expenses
How to compare
- Buy on health and age timing, not on market timing — there's no 'good time' to wait for
- Treat employer coverage as a supplement, never the plan
- Get real quotes before assuming the cost — misperception is the biggest barrier
- Never cancel old coverage before the new policy is issued
- Use the free-look period to actually read the policy
Your next step
Stop estimating the cost from memory — the research says you're probably overestimating it. Run the coverage estimator, get quotes for identical coverage from several insurers, and apply while you're healthy. Then read the issued policy during your free-look period.
When Should You Buy Term Life Insurance FAQs
What age should I buy term life insurance?
As early as you have people depending on your income. Age is a primary rating factor — younger applicants pay less — and buying while healthy locks in today's underwriting. Waiting risks both higher age-based pricing and new health issues.
Is my employer's life insurance enough?
Usually not. The NAIC warns employer coverage alone is typically insufficient and may not follow you if you leave the job. Treat it as a supplement to an individual policy, not the plan itself.
Why do people think life insurance costs so much?
Industry research finds consumers — especially younger adults — overestimate term-life costs, in some studies by 10x or more versus actual average premiums for healthy applicants. That misperception is a leading driver of the coverage gap. Get real quotes before deciding it's unaffordable.
Can I return a life insurance policy after buying?
Yes — new policies carry a free-look period, usually 10 days, for a full refund if you're not satisfied. Use it to read the exclusions and conversion terms with fresh eyes.
Should I cancel my old policy before applying for a new one?
No. The NAIC advises never canceling existing coverage until the new policy is issued — health changes during underwriting can affect your insurability and premium. Overlap them briefly instead.
Sources
Every figure on this page comes from the official source named. We never use aggregator sites as sources.