Should I get life insurance in my 20s?

Actually, you’re at the perfect age to think about life insurance. Here’s why.

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Your 20s may be the perfect age to learn about life insurance. There are advantages to buying it at a young age, one of them being cost. You certainly don’t have to buy it if you’re not ready, but it never hurts to arm yourself with more options.

Why we like:

Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.

  • Offers on-the-spot coverage
  • No annual or cancellation fees
  • 30-day money back guarantee

Why we like: Bestow

Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.

  • Application takes less than 10 minutes.
  • Available to people ages 25 to 54-years-old.
  • Currently offered in 40 states.

Is life insurance in my 20s worth it?

In general, if you have people depending on your income – for example, parents, children or a spouse – a life insurance policy can protect them financially should anything happen to you. While the odds of passing away soon in your 20s aren’t high, it’s still a possibility.

Odds of a 20-something-year-old passing away

AgeWithin the next yearWithin the next 5 yearsWithin the next 10 yearsWithin the next 20 yearsWithin the next 30 years
200.07%0.41%0.90%2.20%4.67%
210.08%0.44%0.94%2.30%4.99%
220.08%0.45%0.98%2.41%5.34%
230.09%0.47%1.01%2.52%5.73%
240.09%0.48%1.04%2.64%6.15%
250.09%0.49%1.07%2.78%6.60%
260.10%0.51%1.11%2.94%7.10%
270.10%0.52%1.15%3.12%7.64%
280.10%0.54%1.20%3.32%8.23%
290.11%0.56%1.25%3.55%8.86%

*Based on the combined male and female percentages of our odds of dying data.

While the odds are relatively low, the rates you’ll score now will be a lot lower than if you applied for coverage in your 30s or 40s.

How much will life insurance cost?

You might be surprised by how inexpensive life insurance can be. If you’re in good health, it’s possible to get a 20-year term life policy with a $250,000 death benefit for around $15 a month.

Average monthly premiums of a $250,000 20-year term life policy for individuals in excellent health

Age
Average monthly premiums for a male
Average monthly premiums for a female
20
$18.00
$14.52
21
$17.89
$14.49
22
$17.81
$14.49
23
$17.68
$14.49
24
$17.57
$14.47
25
$17.48
$14.56
26
$17.56
$14.66
27
$17.65
$14.82
28
$17.73
$14.94
29
$17.78
$14.57

* Based on the rates of 12 providers provided to us by Quotacy

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Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.

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What type of life insurance should I buy?

Term life insurance should be sufficient. It’s the simplest and cheapest policy, and offers protection for a set period of time. For instance, a 30-year policy can cover you well into your working years, when you might need a death benefit most. By the time it expires, you’ll probably have fewer financial obligations – and won’t need as much insurance. At that time, you can renew your policy or take out another life insurance policy.

If you want lifelong coverage, or you want to supplement your retirement savings, you could opt for a permanent policy – like whole life.

5 reasons to buy life insurance in your 20s

Here are five reasons why you might want to purchase a policy while you’re young:

1. The rates are cheap

The younger and healthier you are, the cheaper your rates will be – which is why it’s best to apply for life insurance as soon as you identify a need for it. As you age, your life expectancy is shorter and you’re more likely to develop health conditions, so insurers hike up your rates. But if you apply for coverage in your 20s, you can lock in a low premium for years – or even the rest of your life if you opt for a whole life policy.

2. You’re married

Many people tie the knot in their 20s. If you’re married (or planning to get married), you might want to take out a life insurance policy to replace your income and protect your spouse financially. If you die prematurely, your policy would kick in to pay for things like the mortgage or rent, credit card bills, or car loans. It may also help your spouse to maintain the lifestyle they were accustomed to.

3. You’re having a baby

Approximately 16% of women who gave birth in 2017 were aged between 20 to 29, according to the US Census Bureau. If you’re a parent, it’s a good idea to buy coverage in case something happens to you. Most young parents buy a policy that carries their kids through college, when they enter the workforce and start earning their money. You can either name an adult beneficiary to manage the money according to your wishes, or work with an attorney to set up a life insurance trust. The trust outlines when and how the funds should be distributed to your kids.

4. You’re in debt

Let’s say you have student loans, like many twenty-somethings do. Government student loans are forgiven upon your death, but private student loans aren’t. So, if you die before paying off a private loan, your beneficiaries will be responsible for those repayments. To prevent that from happening, consider buying a life insurance policy. If you die, your beneficiaries can use the proceeds to settle any outstanding debts. They can also use the money to cover your funeral costs and final expenses.

5. You want to start investing

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. Or, you can surrender the cash value and funnel that money into other investments.

While life insurance can be a handy investment vehicle, it’s a good idea to compare your options. Depending on your risk tolerance, you may be able to grow your money faster in other investments.

Pros and cons of buying life insurance in your 20s

Pros

  • Lock in your premium before you get older and potentially develop health conditions.
  • A term life policy can be relatively inexpensive.
  • If you purchase a whole life policy, you give your cash value more time to grow.

Cons

  • An insurance premium — especially one for whole life insurance — can strain your budget.
  • You may not have many people depending on your income, so life insurance can feel like an extraneous expense.
  • Instead of paying an insurance premium, you could invest your money and potentially get a higher return.

Compare life insurance providers for people in their 20s

Name Product Issue Ages Coverage Range Medical Exam Required State Availability
Bestow
21 - 54 years old
$50,000 to $1,000,000
No
Not available in New York
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
AIG
AIG
20 - 85 years old
$100,000 to $2,000,000
Depends on policy.
Products and product features may not be available in all states.
This well-established life insurance provider could offer you $250,000 worth of coverage for as low as $14 per month.
LadderLife™ Life Insurance
20 - 60 years old
$100,000 to $8,000,000
No
Not available in New York
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
Policygenius
18 - 85 years old
$10,000 to $10,000,000+
Depends on provider and policy
All 50 states
Compare affordable quotes from 12+ A-rated life insurance companies side-by-side.
Haven Life
18 - 64 years old
$100,000 to $3,000,000
No
All 50 states
Customized term life insurance policies up to $3 million, no medical exam for certain applicants.

Compare up to 4 providers

Bottom line

If you’re a 20-something, it’s not too early to think about life insurance. In fact, it’s a perfect time to start your research.

You may be able to lock in a great premium at your age. If you do, you can pay the same rate for decades, or even for life. You’ll be covered by a death benefit well into your working years and perhaps after you’ve retired.

Want to learn more? Check out our comprehensive guide to life insurance, where you can research your options and compare providers.

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