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Should I Get Life Insurance in my 20s?

should i get life insurance in my 20s

Written By Doug Mitchell

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA.  Doug has spent close to 30 years in the insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health.  Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

Holly Mitchell  &

Holly Mitchell’s background in life insurance insurance goes back to 1985 when she worked for her father who was a New York Life agent. Holly has a marketing degree from Auburn University and has had a life insurance license since 2008. In addition to advising life insurance for customers all around the country, Holly is our website fact checker.

Rob Pinner   &

Rob Pinner is the founder and CEO of Pinner Financial Services servicing all 50 states. Rob started his insurance career in 2002.

Louis LaBash

Results-driven and innovative life insurance professional with 30 plus years of life insurance industry sales and marketing experience. Recognized as a pioneer in the field, leveraging phone and internet channels to exceed personal sales of over $100 million during the first decade of the 21st century. Creator of a highly effective intuitive IUL life insurance sales software that facilitated the sale of millions of dollars of indexed universal policies by numerous life insurance agents. Proven track record as a Managing General Agent (MGA), Life Agent, IUL Life Insurance Sales Software developer, and leading-edge creator of insurance marketing tools, educational content, and delivery systems.

Table of Contents

In your 20s, the future looks exciting and adventurous, with few clouds and no discernible shadow of potential tragedy.

Though you’re unlikely to look to the end of your life from this sunny vantage point, this is actually an excellent time to think ahead and plan for the future. You’re on your own now and thinking about things you’ve never considered before. Here’s the answer to the question “should I get life insurance in my 20s?”

Investing in life insurance is easier and more affordable now than it will likely be at any other time.

Most people in their 20s, or even their parents, don’t necessarily have life insurance anywhere on the radar.

And, honestly, it’s for good reason, since life expectancy rates are up in the 80s for both genders.

However, many young adults every year from accidents, or even health-related items, so it’s something you really ought to plan for.

The Advantages Of Buying Early

young people in their 20s doing research on life insuranceYour life insurance premium is based on your age, your health, and your lifestyle, too.

In your 20s, you are probably in the best health of your life.

Unless you’re regularly engaging in dangerous activities like skydiving, you’ll find that your life insurance premiums are extremely reasonable at this stage of your life.

Though you can hope to enjoy the same level of health in 10 or 20 years, the sheer fact of your advancing age will make a difference in the premiums that you can expect.

When you purchase life insurance, you lock in your premium for the term of the policy. It’s nearly impossible to get life insurance if you’re suffering from a major illness.

If you’re healthy now, this is the best possible time to purchase a policy.

Why Life Insurance Is Important

When you’re young, you may not have dependents to think about yet, so you could find yourself questioning the importance of life insurance.

However, you can benefit from life insurance even if you don’t have a home or family yet.

If you have credit card or student loan debt, you still have some major expenses you’re going to leave to those who survive you.

Funeral and burial expenses are a concern as well.

Whether or not you have children or parents who survive you, it’s important to leave them with as much assistance as you can in the event of an unexpected tragedy.

Even if you don’t already own a house with a mortgage, planning ahead is a great way to not only protect future assets at a lower cost, but it can be advantageous to a creditor who is reviewing your creditworthiness when you are in the buying process.

Thinking Ahead With Your Policy

Though you may not have dependents or major debt right now, you should look to the future when you’re choosing a life insurance policy.

You can purchase a term policy for 10-, 20-, or 30 years.

If you’re 25, you want to think about what your needs will be when you’re 55.

In those 30 years, you could not only have children, but also see them grow up and start families of their own.

You may hope to buy a home and new cars in that time as well.

When you buy insurance at a young age, you need to think about how your future could look in a few decades, and invest in an insurance plan that will protect your future family and investments, even if you don’t know yet exactly what those will be.

Term Life Insurance

Term life insurance is the most common choice, and this is typically the best option for someone in their 20s. Term life insurance will cover you for the term of the policy.

The maximum term for a life insurance policy is usually 30 years. This is the best option for you at this point in your life.

You’ll maximize the cost savings by locking in your low premium for as long as possible.

If you buy your policy between the ages of 20 and 39, each dollar you spend on term life insurance has a value 7 to 10 times greater than what you would get with a whole life policy.

A term life insurance policy will lock in your low price when you buy it and keep you safe for several decades.

Hopefully, the policy will expire before you use it. However, you will enjoy peace of mind and protection from your investment in the meantime.

Buying Policies Over Your Lifetime

You might be wondering now why you would need a life insurance policy that will expire long before you expect to cash it out.

This is because you may not actually need life insurance when you reach a more advanced age.

Depending on your income and investment choices, you may find that you no longer need life insurance when your 30-year policy expires.

If you do purchase another term plan, this one will probably be shorter.

All things being equal, and if you execute your plan correctly, your assets and income in retirement should be enough to take care of you.

This would create a nice offset you wouldn’t need to insure.

Life insurance offers coverage for individuals who don’t have funds of their own to handle their outstanding debts or protect their families from the loss of income when they pass.

When you retire, you may no longer have dependents or major debt to worry about.

Whole Life Insurance

Whole life insurance is the alternative to term life insurance (and there are many other policy types in between, too).

Typically, whole life insurance is usually considered only when you’re sure that you will need the policy for the rest of your life.

In your 20s, it is unlikely that you’ll want this type of plan, but brokers make more commission off this type of plan, so expect to hear a lot about it.

Whole life insurance is more expensive because it lasts for your entire life.

As mentioned above, you probably won’t need coverage after retirement, as long as you’ve spent your life making smart investments, so this is one strike against this option.

The sales pitch for this type of plan will also point out that you can earn dividends on whole life insurance policies.

While this is true, a whole life insurance plan is not the best place to invest your money.

If you’re interested in earning dividends, consider building a diverse portfolio or investing in stocks and bonds instead.

Bottom Line

When you’re ready to purchase your life insurance policy, look for a broker who represents several different companies.

This will give you access to diverse options, so you can easily choose the plan that’s best for you.

Life insurance is important at any age, especially when you’re looking forward to a bright future with a family, home, and other big changes.

Don’t make the mistake of overlooking this investment.

For each person, the carrier chosen can have a distinct set of differences, which includes your shot at approval, and the premiums you’ll pay.

Take your time, do your research, and find out which company is really the best option.

Ask a friend, as a parent, and talk to anyone else who has coverage. Get some insight, as they may have already gone through this process; they may be able to save you lots of time.

Also, consider checking into no-exam life insurance policies if you’re needle-averse. It’s a way to skip the exam, but also get covered more quickly and not let the process drag on and on.

Still have questions?

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Doug Mitchell, CLU

Doug Mitchell, CLU

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent close to 30 years in the life insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health. Some other notable items about Doug: Top of the Table Million Dollar Round Table member (MDRT). (MDRT is a global, independent association of the world’s leading life insurance advisors) | Premier Partner with Lincoln Financial and Cabinet Member | Served two years as President of the Auburn/Opelika Association of Financial Advisors | Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award | New York Life, Executive Council Member | Currently serves as President of Ogletree Financial, a life insurance General Agency. | Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

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