Is Life Insurance Worth It for Young Adults?

When you’re young and healthy, life insurance might just be the last thing on your mind. After all, why would you need it when you have your whole life ahead of you? But don’t dismiss the idea completely. It’s worth considering the benefits of having protection.

What is the Minimum Age for Life Insurance?

The minimum age varies on the insurer, but it’s usually 18 years old. Many insurance companies will also require applicants to meet additional criteria. Such as being in good health and with no major medical conditions.

What Age is Best to Get Life Insurance?

The best age to get life insurance is typically in your early twenties. At this point, you are most likely financially independent and have some assets that could require protection. Life insurance can help provide financial security for yourself and your family if something should happen to you.

Though you don’t think you need it, purchasing a policy at this age can often be cheaper than waiting until later. Rates tend to go up as you age, so the younger you are when you purchase a policy, the more affordable it may be.

Here are just a few reasons life insurance can be worthwhile:

Financial Protection

As a young adult, you may not have dependents or significant financial responsibilities yet. However, life insurance can provide a safety net in case of unexpected events. If you were to pass away, it could help cover funeral expenses, or any financial burdens left behind.

Locking in Low Premiums

Another advantage is the ability to lock in low premiums. Life insurance premiums are based on several factors, including age and health.

Buying cover at a young age can help secure lower premiums. This can save you money in the long run compared to purchasing life insurance later in life.

Income Replacement

Even if you don’t have dependents, there are still other responsibilities, such as loans or supporting ageing parents. In the event of their passing, it can help provide income support to cover ongoing obligations.

It can help replace the future income potential lost because of premature death, giving peace of mind to you and your loved ones.

Things to Consider

While there are benefits to getting life insurance, it’s not for everyone. Here are a few factors to consider when deciding if life insurance is worth it for you:

  1. Dependents: Do you have dependents who rely on your income? If you have a spouse, children, or other people who rely on you, life cover can provide financial support for them.
  2. Debt and financial obligations: Do you have debts or a mortgage? Life insurance can help cover these obligations, preventing your loved ones from inheriting your debt burden.
  3. Future insurability: As you age, your health may change, and you may develop medical conditions. These can make it more difficult or expensive to obtain protection. By getting a policy at early, you can secure cover while you are healthy and insurable.

Choosing a Policy

No matter what stage you are at in life, it’s important to evaluate the different policy options.

Term Life Insurance

A popular choice among young adults. It provides cover for a specific period, typically 10-30 years. It’s generally more affordable and offers flexibility for people who may have changing financial needs in the future.

There are 3 levels of cover to choose from:

  • Level term: Cover remains the same throughout the term. This includes the premiums you pay and payout value.
  • Decreasing term: The amount of cover decreases over time in line with a debt, such as a mortgage.
  • Increasing term: The amount of cover increases over time to keep up with inflation. Because of this, premiums also increase.

Whole Life Insurance

Whole life insurance is a type of permanent policy that offers lifelong protection and a guaranteed payout. It can also be helpful for long-term financial planning. The downside is that premiums tend to be more expensive than for term cover.

It offers the security in that death benefit that never expires, as long as you keep making payments. This can be beneficial in the future when you might be married or have children.

You can also get joint life insurance – this covers two people under a single policy. Ideal if you have a partner or spouse. It can either payout after the first death or after both of you have died. Such a policy can ensure your loved ones are taken care of financially, regardless of who passes away first.

How Much Does Life Insurance Cost?

The good news is that life insurance is usually cheaper when you are younger and in good health. Premiums will depend on your age, gender, health status, lifestyle habits, and the type of policy you choose.

Compare different life insurance policies to find one that fits your needs. There are a few factors you should consider when doing so:

  1. Cover amount: Determine how much cover you need, as this will affect the cost of your policy. Consider your current financial commitments and goals.
  2. Premiums: The amount of money you need to pay each month or year for cover. Compare quotes from different insurers to find the most cost-effective option.
  3. Add-ons: Some policies offer add-ons that can be added to your policy, such as disability cover or critical illness cover.
  4. Claims process: How easy is the claims process? Check the insurer’s claims history to ensure a smooth process for your loved ones.
  5. Customer service: Good customer service should be one of your top priorities when selecting a provider. Make sure the company you choose has a good reputation, as this will make it easier to manage your policy.

Getting life insurance at a young age can be beneficial for many reasons. Take some time to think about your family needs, as well as the different policies available.