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Compare life insurance for young adults
Young, healthy applicants score the best life insurance rates — which makes your 20s a good time to buy a policy.
Narrow down life insurance companies by coverage levels, riders offered, term lengths and more to get a quote.
As a young adult in your 20s, you’re likely concentrating on your career, paying off loans and trying to build up your savings. But if you’re interested in protecting your family and finances, you could lock in rates starting around $13 to $15 a month by purchasing a life insurance policy while you’re young and healthy.
What’s the best life insurance for young adults?
The best life insurance policy for young adults comes down to your needs. Term life insurance is the best choice for most young adults, though a permanent life policy may suit the needs of someone who wants lifelong coverage while building savings.
We recommend: Term life insurance
Term life insurance is the simplest and cheapest type of coverage, making it the best choice for most young adults shopping for a policy. While it’s cheap, life insurance is still an expense, so you want to ensure you buy a policy you can afford. With term life insurance, the premiums are predictable, so you know exactly how much you’ll pay each month or year. And if you die during your policy’s term, it kicks in to take care of your loved ones and cover any debt, like student loans.
Whole life insurance for young adults
If you want lifelong coverage and you’re already planning to supplement your retirement savings, you could opt for a permanent policy — like whole life which builds cash value over time and pays out a death benefit when you die. Permanent policies tend to cost more since they have a cash value component.
But, if you buy permanent life insurance at an early age, your premiums could grow into a sizeable cash asset as the years go by. Once you’ve built up enough cash value — which usually takes 10 to 15 years — you can start taking out loans against your policy. However, life insurance isn’t as effective for investing as other tools like a 401k or IRA.
How much is life insurance for young adults?
The average cost of life insurance for young adults between 20 and 30 years old for a $500,000, 20-year term policy is $22.34 for a man and $18.62 for a woman. At this age, it’s easy to qualify for low preferred rates since age and health are two of the biggest factors that affect your rate.
| Age | M/W | $250,000 policy | $500,000 policy | $1,000,000 policy |
|---|---|---|---|---|
| 20 | Man | $14.93 | $22.83 | $36.12 |
| 20 | Woman | $12.69 | $18.42 | $28.06 |
| 21 | Man | $14.84 | $22.70 | $36.00 |
| 21 | Woman | $12.69 | $18.42 | $28.06 |
| 22 | Man | $14.75 | $22.51 | $35.88 |
| 22 | Woman | $12.69 | $18.42 | $28.00 |
| 23 | Man | $14.66 | $22.35 | $35.63 |
| 23 | Woman | $12.67 | $18.39 | $27.79 |
| 24 | Man | $14.55 | $22.12 | $35.31 |
| 24 | Woman | $12.67 | $18.39 | $27.73 |
| 25 | Man | $14.46 | $21.96 | $34.99 |
| 25 | Woman | $12.73 | $18.49 | $27.73 |
| 26 | Man | $14.48 | $22.01 | $35.16 |
| 26 | Woman | $12.79 | $18.59 | $28.07 |
| 27 | Man | $14.54 | $22.13 | $35.26 |
| 27 | Woman | $12.83 | $18.73 | $28.34 |
| 28 | Man | $14.67 | $22.22 | $35.75 |
| 28 | Woman | $12.94 | $18.83 | $28.66 |
| 29 | Man | $14.75 | $22.37 | $35.98 |
| 29 | Woman | $13.00 | $18.99 | $29.06 |
| 30 | Man | $14.89 | $22.54 | $36.29 |
| 30 | Woman | $13.06 | $19.11 | $29.32 |
Rates are provided by Quotacy based on 20-year term policy for healthy applicants, and valid as of April 2021 in all states except Montana.
What’s the cheapest life insurance for young adults?
To find the cheapest insurer for young adults, we compared the rates for a $250,000, 20-year term life policy for a healthy 20-, 25- and 30-year-old man between 12 major insurers. According to our research, Banner Life and Protective offer the lowest rates across each of these age groups at rates between $12.30 to $12.61 monthly.
Life insurance rates by insurance company
| Company | 20-year-old rates | 25-year-old rates | 30-year-old rates |
|---|---|---|---|
| AIG Life Ins (American General) | $12.61 | $12.61 | $12.82 |
| Banner Life (Legal & General America) | $12.30 | $12.30 | $12.61 |
| Cincinnati Life | $15.18 | $14.52 | $13.64 |
| Equitable | $20.75 | $19.25 | $20.55 |
| John Hancock | $16.06 | $16.06 | $17.46 |
| Pacific Life | $12.83 | $12.83 | $13.00 |
| Principal | $12.99 | $12.99 | $13.16 |
| Protective | $12.30 | $12.30 | $12.61 |
| Prudential | $24.06 | $20.56 | $22.09 |
| SBLI | $12.80 | $12.80 | $12.94 |
| Transamerica | $12.69 | $12.69 | $12.90 |
| United of Omaha | $14.62 | $14.62 | $14.84 |
How much life insurance do I need in my 20s?
How much life insurance you need comes down to your financial obligations and how much you’re willing to pay in premiums.
- Assess your financial responsibilities now and in the near future. Be honest about your needs, and think about student loans, existing debts, funeral costs and your family’s everyday expenses if you’re married or have children. If you have aging parents, you might want to consider the costs of their care, too.
- Subtract any savings or other income your loved ones will have. After subtracting your savings from your financial responsibilities, the number you’re left with gives you an idea of how much coverage you may need to cover your debts and dependents. Be sure to balance the amount you need with the amount of coverage you can afford to pay for monthly.
It’s a good idea to review your policy as your situation changes. If you’ve gotten married, bought a house, or acquired assets or debt, you could consider buying a higher level of coverage.
In your 20s, the difference between double the coverage is often less than a $10 monthly difference. For example, for a healthy 20-year-old woman, doubling your coverage from a $250,000 policy to a $500,000 policy costs $5.73 more each month.
5 reasons to consider life insurance as a young adult
If you have financial obligations or loved ones who rely on your income, life insurance can help protect you and the people you care about. Though there are other common reasons someone in their 20s may opt for a policy at this age:
- You have private student loans. Many private loans may be cosigned by parents — which means they’re liable for your loans. If that’s your situation, and you die unexpectedly, a life insurance policy can ensure your parents have the money to settle your student loan debt.
- You’re married with children. If you have a spouse or children who depend on you, life insurance provides a way to make sure they are still taken care of after you die.
- You have outstanding debt. If you have a mortgage, car loan, credit card or any other outstanding debt, a policy can take care of the repayments. Plus, it helps your parents or any other cosigner keep their credit scores in check.
- You take care of your parents. If you’re the primary caregiver for your aging parents and you die unexpectedly, life insurance can pay for care, living or medical expenses.
- You can get cheap rates. Since insurers reserve the best rates for young and healthy applicants, your 20s is the best time to lock in a good rate.
Pros and cons of buying life insurance as a young adult
Pros
- Lock in low premiums. Keep a premium based on your current health before you get older and potentially develop health conditions.
- Relatively inexpensive. A term life policy can be budget-friendly depending on which coverage amounts you choose.
- Cash value growth. If you purchase a whole life policy, you give your cash value more time to grow.
Cons
- A lower percentage of use. Depending on your age, you may not have many people depending on your income, so life insurance can feel like an extraneous expense compared to getting life insurance in your late 30s or 40s.
- Low return on investment. Instead of paying an insurance premium, you could potentially get a higher return by investing your money elsewhere.
Bottom line
While your priorities as a young adult might be establishing your career, paying rent, and traveling, it’s worth looking at life insurance. When you’re young, and healthy, you can qualify for low preferred rates — and for most types of policies, those rates are locked in.
Though it can be cheap, life insurance is still an expense. If you decide to explore life insurance as a young adult, shop around for the best policy with our comprehensive guide to life insurance.
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