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Life Insurance in Your 20s

In your 20s, you’re probably busy planning the first stages of your adult life. You might be working on graduating from college or focusing on landing your first post-college job. Getting a life insurance policy might be the last thing on your mind at this time.

Although you may think you’re too young for a policy, it is never too early to plan for your long-term financial commitments. Your children (if you have any) and your partners aren’t the only people who may suffer if you die unexpectedly. Some 20-somethings help support their parents. With a life insurance policy, you can help ensure your parents or other dependents will be able to afford their necessities and access long-term care if something were to happen to you.

9 Things You Need to Know When Buying Life Insurance in Your 20s

  1. Buying life insurance in your 20s may be able to provide you a more affordable rate than if you buy a policy later in life. When you’re young and healthy, you may be able to lock in a lower monthly premium. As you get older, your monthly payment can be significantly more expensive for the same amount of coverage.
  2. Shopping around for an affordable life insurance policy can help you find the best rates. Start online and get quotes from more than one insurance company to help ensure you’re getting the best deal possible.

  3. There are several different types of life insurance plans available, but they generally fall into the category of either term life insurance or permanent life insurance. Term life insurance offers coverage for a predetermined period of time and expires at the end of your “term.” Permanent life insurance lasts for the rest of your life (as long as you have paid your premiums in full and on time) and accumulates tax-deferred cash value over time.

  4. Whether you are dealing with a life insurance agent or a broker, be sure to check their credentials and the financial standing of the companies they represent before you agree to purchase a policy.

  5. Adults in their 20s with spouse or children, you’ll need a policy that’s large enough to help protect them until they are able to support themselves financially.

  6. Be sure to factor in any student loans taken out or cosigned by your parents when you calculate how much life insurance to buy. Life insurance can help them continue to make those payments.

  7. When you fill out an insurance application, honesty is essential. If you hide any health problems, the company may be entitled to deny paying a death benefit to your beneficiaries when you die.

  8. Make sure you understand all of the details of your policy. Many insurance companies offer a “free look” period for up to 30 days, during which you can cancel your policy and get a refund for the premium. Use this time to review your plan to ensure the coverage meets all your needs.

  9. Ask your licensed insurance agent about what happens to the policy if you stop paying your premiums. It helps to know what to expect before it happens.

No matter your circumstances, don’t rule out the possibility that you may need life insurance in your 20s. If you plan on starting a family or want to buy a house in the near future, you can get protected early and may be able to secure a lower monthly premium.

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