Benefits of life insurance for young adults
Getting life insurance in your 20s or early 30s has several advantages. It’s typically more affordable when you’re young and healthy, allowing you to lock in lower rates for the long term. It also helps provide financial security, ensuring that you’re covered in case unexpected health issues arise later, which could make coverage more costly or harder to get. Additionally, some types of life insurance offer tax benefits, such as tax-deferred cash value growth or tax-free payouts to beneficiaries, adding extra financial value.
Disadvantages of life insurance for people in their 20s and 30s
If you don’t have anyone financially dependent on you and don’t have major debt, there may be other priorities in your life. For example, if you're single, debt-free and living on a tight budget, your money might be better spent on building your savings or paying off existing debts.
Should you get life insurance in your 20s?
Getting life insurance in your 20s can make financial sense in a few key situations. If you have significant debt, such as student loans co-signed by a parent, a life insurance policy can help protect your loved ones by covering that debt if something happens to you. It’s also a smart move if you’re planning to start a family soon. Buying a policy while you’re young and healthy helps lock in lower premiums, saving you money in the long run.
Which type of life insurance is popular among young adults?
There are generally 2 types of life insurance: term and permanent (which includes whole and universal life insurance). Term life insurance covers you for a set period, or term, typically 10 to 30 years, while permanent policies last for your entire life and often include a savings or investment component.
Many young adults choose term policies because they’re straightforward and budget-friendly. You pay for only the coverage you need during a specific time, like when you’re paying off a mortgage or starting a family. This makes term life a practical and affordable choice for those early in their financial journeys.
Life insurance FAQs
At what age should you get life insurance?
There isn’t a perfect age, but the earlier you buy, the cheaper it usually is. Consider it if you have dependents, shared debt or want to lock in low premiums for the future.
Do I need life insurance if I’m single?
It depends. If you’re single, debt-free and no one relies on your income, life insurance might not feel like a priority. However, it can still be useful. For example, if you have outstanding debts such as student loans or credit cards that a co-signer may be responsible for, life insurance can help cover those.
How do you find affordable life insurance for young adults?
Start by comparing quotes online, with a focus on term life policies, as they are usually more affordable than whole life insurance. Life insurance rates are based on several factors, including your age, health, lifestyle, and the amount of coverage you need. Generally, younger individuals receive lower rates because they are considered lower risk. To shop for life insurance on a budget, assess your coverage needs carefully, prioritize term policies, and maintain a healthy lifestyle to improve your eligibility for better rates.
