Should I get life insurance in my 20s? | finder.com

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Compare life insurance in your 20s

Life insurance is cheaper when you're younger, so now's the perfect time to buy coverage if you need it.

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There isn’t a one-size-fits-all answer to the question: What age should I get life insurance? But your 20s are 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.

How much does life insurance cost in your 20s?

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.

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

AgeManWoman
20$16.28$13.48
21$16.12$13.49
22$15.96$13.49
23$15.79$13.49
24$15.63$13.49
25$15.46$13.66
26$15.47$13.73
27$15.58$13.79
28$15.65$13.92
29$15.81$13.98

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 maintain the lifestyle they’re accustomed to.

3. You’re having a baby

If you’re a parent, it’s a good idea to buy coverage that can help take care of your children if you were to die prematurely. Most young parents buy a policy that carries their kids through college, when they enter the workforce and start earning their own 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. 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. However, life insurance isn’t as effective for investing as other tools like a 401k or IRA.

What type of life insurance should I buy in my 20s?

There are a few types of policies to choose from:

  • Term life insurance. The simplest and cheapest policy, term life insurance 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.
  • Permanent life insurance. If you want lifelong coverage or to supplement your retirement savings, you could opt for a permanent policy — like whole life insurance. These policies build cash value over tine, and once you’ve accumulated enough, you can begin to borrow against your policy to fund large purchases.
  • No medical exam life insurance. You can opt for a simplified issue policy, which skips the medical exam. However, these policies are expensive, so they’re not the most cost-effective option if you’re young and healthy.

Compare life insurance for people in their 20s

Name Product Issue age Minimum Coverage Maximum Coverage Term Lengths Medical Exam Required
Bestow
18 - 60 years old
$50,000
$1,500,000
10, 15, 20, 25, 30 years
No
Get a quote in less than 10 minutes with on-the-spot approval and no medical exam.
Haven Life
18 - 64 years old
$100,000
$3,000,000
10, 15, 20, or 30 years
No exams for some applicants
Fill out a quick online application and get approval in minutes with up to $3 million in coverage.
Sproutt
18 - 100 years old
$50,000
$10,000,000
5, 10, 15, 20, 25 and 30 years
No
Compare 40+ insurers and apply online to get the lowest possible price — no medical exam required.
Ladder
20 - 60 years old
$100,000
$8,000,000
10, 15, 20, 25 or 30 years
Depends on policy
Apply for term life insurance online without the medical exam. Get an instant decision and adjust your coverage at no charge.
Policygenius
18 - 85 years old
$50,000
$10,000,000
10, 15, 20, 25, 30 years
Depends on provider and policy
Compare 12+ top insurers side-by-side to get the best possible deal, and shop return of premium policies online.
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Pros and cons of buying life insurance in your 20s

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. At this 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 at an older age.
  • Low return on investment. Instead of paying an insurance premium, you could potentially get a higher return by investing your money elsewhere.

Is it worth buying life insurance in your 20s?

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 if you die unexpectedly. While the odds of passing away in your 20s aren’t high, it’s still a possibility. And 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.

Odds of dying in your 20s

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.

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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