Life insurance is cheapest when you’re young and healthy, so buying a policy in your 20s or 30s can save you money while still securing important financial protection.
Updated June 18, 2021|8 min read
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If you’re single, in your 20s or 30s, and don’t have children, probably isn’t the first thing on your mind. While life insurance is an important part of a comprehensive financial plan for people with dependents, purchasing a policy means adding to your budget. For many young adults who are just starting their careers or saving for future goals, those premiums can often seem like an unnecessary expense.
But buying life insurance in your twenties and thirties can actually save you money in the long run. How do you determine whether the cost of life insurance is worth it and which company is the right fit for you? There are a few simple guidelines that can help you decide whether it makes sense for you to buy life insurance right now. Read on for our top seven life insurance company recommendations for young adults.
Ready to shop for life insurance?
Brighthouse Financial offers one of the best overall life insurance products for young adults ages 25 and up. Brighthouse is one of the only life insurance companies that’s able to offer competitively priced, same-day, no-medical exam coverage for qualifying applicants.
Brighthouse isn’t the best option for young adults with pre-existing medical conditions such as diabetes, a history of cancer, or a criminal record. However, Brighthouse offers term life insurance for marijuana users.
Affordability: premium rates for Brighthouse SimplySelect term life insurance are below industry average.
|AGE||BRIGHTHOUSE AVERAGE||INDUSTRY AVERAGE|
No-medical exam: healthy applicants can forgo the medical exam and instead answer medical questions over the phone to get covered faster.
Instant decision: getting approved for a Brighthouse SimplySelect term life insurance policy usually happens within 24 hours of submitting your application. If you have a complicated medical history, lower credit score, concerning motor vehicle report, or medical records that require an explanation from your doctor, you may have to wait longer.
While we don’t typically recommend whole life insurance over term life insurance, if you have a higher net worth or need insurance coverage that lasts a lifetime, MassMutual is a great option, offering reasonable prices for comprehensive coverage.
MassMutual’s whole life insurance policies offer some of the best dividends and cash value growth compared to other whole life insurance providers. While cash value life insurance isn’t a good primary savings vehicle for retirement, it can offer alternative savings alongside traditional retirement accounts like a 401(k) or IRA.
For newlyweds or young families, we recommend purchasing term life insurance with Brighthouse because they will fully match spouse coverage amounts. That means if one partner is a higher earner than the other, your partner is currently unemployed, a student, and/or a stay-at-home parent, you can both have the same face value policy to better provide for one another if the unexpected happens.
Principal is one of the best life insurance companies for students, including undergraduates, part-time students, and those earning a higher degree. Students need to provide their projected post-graduation income based on their expected degree or past work/internship experience to justify coverage amounts.
We chose Principal over other life insurance companies that offer student coverage because it allows students the highest coverage amounts (up to $1 million). It’s a great choice for those with large student loans or those who expect to earn higher salaries upon graduation.
Most federal student loans, with the exception of Parent PLUS loans, are discharged upon the death of the borrower. However, young adults with private student loans – especially if they are co-signed with someone else – should consider buying life insurance. Typically, parents who have cosigned loans with their children consider buying a life insurance policy for their child, but Principal makes it easy for students to get their own policies.
Brighthouse SimplySelect makes it easy for qualifying applicants to skip some of the more tedious parts of underwriting, specifically the life insurance medical exam. With offers available in as little as 24 hours, Brighthouse’s policies are some of the fastest available.
People in their late 20s and 30s can take advantage of Brighthouse’s accelerated underwriting term life insurance if they are generally healthy and do not have any underlying medical conditions. “Being able to get an offer on the initial phone call makes for a great life insurance buying experience,” says Eloise Spinello, Associate Director of Carrier Relationship Management at Policygenius.
For people in their early 20s, however, you may not have enough health data to qualify for accelerated coverage, even if you’re healthy. “What is surprising for applicants aged 26 and below is they may not have enough health information such as medical records, blood work, or past surgeries available for a life insurance company to feel comfortable offering coverage without a medical exam,” adds Spinello.
Indoor rock climbing won’t affect how much you pay for life insurance, but riskier hobbies such as outdoor rock climbing can factor into your life insurance premiums. Principal looks more favorably upon outdoor rock climbers than other life insurance companies who charge flat extras regardless of altitude.
Principal offers the best possible rate classification (Preferred-Plus) to recreational domestic outdoor climbers who use safety gears and do not exceed 13,000 feet in altitude or a 5.7 Yosemite Decimal System (YSD) difficulty rating. International climbing, ice climbing, and a YDS higher than 5.8 will subject you to a $2 per 1000 flat extra.
Commercial airline pilots don’t have to worry about the impact of their job on life insurance rates. However, those who fly recreationally are considered higher risk by most insurers. Depending on your age, how often you fly, and what type of certifications you hold, different insurers have different classification guidelines.
Pacific Life is the best option for recreational pilots who hold an Instrument Flight Rating (IFR), fly 26-150 hours per year, and are at least 20 years old. Flat extras will apply for student pilots, private pilots with less than 26 hours a year, or those without an IFR.
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Life insurance coverage is more than you might think and the younger you are, the cheaper it is to get covered. Costs increase significantly with age because premiums are set by insurers based on your risk of dying while the policy is active. Being young and healthy is a good opportunity to lock in a cheap fixed rate for decades. Each year that you delay buying a life insurance policy, the on average. That means that who takes out a life insurance policy at age 20 could pay as little as $21.26 monthly for the same policy that would cost a 60-year-old $189.08 monthly.
Below is a cost comparison over time for a healthy woman in Ohio, with a 20-year, $500,000 life insurance policy.
|Est. Premium (Monthly)||$21.26||$21.88||$32.42||$71.03||$189.08|
|Est. Total Cost||$5,102.40||$5,251.20||$7,780.80||$17,047.20||$45,379.20|
Over the life of this policy, a 20-year-old woman would pay approximately $2,700 more if she waited until she was 40 to buy the same policy, and nearly $40,200 more if she waited until she was 60.
However, while it’s cheaper to buy life insurance when you’re younger, your age isn’t the only factor that determines the cost of your policy. The following also affects your premiums:
Marijuana or other
Smoking or nicotine use (including )
If there’s someone who currently relies on your income, you’ll want to make sure they’ll be able to stay afloat financially if you unexpectedly pass away. That person could be a partner or , a child, parent, sibling, or even a business partner.
Since the death benefit from life insurance is tax-free and can be used for anything—including , rent, or — life insurance protects the beneficiary of your policy from financial hardships that could result from your death. You can name anyone (or more than one person) as your and you can easily change or update that beneficiary at any point during the policy term if your situation changes.
While federal student loans are typically forgiven if the borrower dies, That means that a parent or anyone else who may have co-signed your student loans could be left on the hook for your debt when you die. (The same goes for any other loans you might have taken out with a co-signer, such as a small business loan or a mortgage.) A life insurance plan that names the co-signer of your loans as your beneficiary can ease the financial burden that might result from your death.
Many people wait to purchase life insurance. But if you know you want kids down the line, you can lock in a cheaper premium rate by buying a life insurance policy now. Not only will you be securing financial protection for your future family, but by saving on premiums, you’ll be freeing up more money for other expenses down the road, such as child care and college.
Though being young is a good time to lock in a cheap rate on a policy, life insurance doesn’t make sense for every person under 30. You probably don’t need life insurance if you are:
A single person without any dependents or debt who isn’t planning on having kids in the future.
A low-income earner whose budget simply can’t cover the cost of premiums.
Self-insured, or someone who already has enough assets to provide for your family and other dependents in the event of your death.
Under the age of 18—life insurance for children is purchased by parents, usually in the form of a on an existing policy.
Premium rates are typically cheaper when you’re younger and healthier in your 20s and 30s. If you anticipate needing life insurance in the next 5-10 years, it’s best to buy a policy sooner rather than later to save money in the long run.
If you have shared debts (mortgage, student loans) or anyone relies on your income (a partner and/or children), you should get life insurance coverage. If this isn’t the case today, but will be in the next 5-10 years, you should also consider life insurance.
Experts generally recommend getting a life insurance policy that can cover your outstanding debts, plus 10-15 times your income. So if you make $50,000 a year and have $25,000 in outstanding student loans, you should buy a life insurance policy with a death benefit amount between $525,000-$775,000.