Should I Get Life Insurance in My 20s?

There’s no one perfect age to buy life insurance. It all depends on your life circumstances and future goals. That being said, the younger you are the more affordable life insurance is.

If you’re in your 20s and life insurance is already on your mind, good for you. Planning ahead isn’t a bad thing.

Term Life Insurance in My 20s

Term life insurance is the most affordable type of life insurance, no matter your age. It’s designed to provide financial protection during a certain period of time, called a term. These terms typically range from 10-40 years. If you die within this period of time, your beneficiaries receive the coverage amount (the death benefit).

Since the coverage is limited to this time period, it’s wise to make sure you buy a policy when it makes sense. If you’re 21 years old, in college, don’t have a long-term partner and no children, it might not be necessary to buy a life insurance policy quite yet.

You’re probably on a pretty tight budget. Even though the term life insurance policy premiums will likely be under $20 per month for you, you may be better off putting that $20 in a savings account.

However, if you’re a young, financially-stable adult that wants to get married and start a family soon, by all means, take advantage of the low rates and buy a policy now.

With term life insurance, your premiums are fixed, meaning they won’t increase the entire duration of your policy. You can even lock in that low monthly rate for 40 years if you really want to.

» Compare: Term life insurance quotes for 20-somethings

If you have children, life insurance is more important than ever. If you die unexpectedly, how would your children’s lives be affected?

Even if you have a partner who also provides financially for your children, the impact of the sudden loss of your income can be devastating.

It’s also important to note that buying a policy now doesn’t mean you can’t buy another policy in the future.

Example:

John is 23 years old and just graduated college. He and his high school sweetheart are getting married at the end of the summer.

John buys a $100,000 20-year term life insurance policy for $9.15 per month.

John wants to make sure his soon-to-be-wife is financially protected while they build their futures together. If he dies unexpectedly prior to age 43, his wife receives a check for $100,000. She can use this money toward a funeral, rent, bills, etc.

John is now 35 years old. He and his wife have two children and a mortgage. He decides to buy a second life insurance policy.

John buys a $500,000 30-year term life insurance policy for $35.24 per month. His first policy terminates in 8 years, but this policy provides protection until he reaches his retirement years.

If you buy term life insurance in your 20s, one thing to make sure your policy has is a term conversion option. This allows you to convert your term policy to a permanent life insurance policy.

This option is beneficial to have because our future is unknown. A conversion option is guaranteed insurability no matter your health. Even if you’re diagnosed with cancer five years after buying your term life policy, you can convert to a permanent policy which provides financial protection for your loved ones your entire life.

A conversion option is free. They don’t cost extra to have on your policy. However, your premiums will increase quite a bit when you convert because permanent life insurance is much more expensive than term.

Having a conversion option doesn’t mean you’re required to convert in the future. It’s just an option for you to take advantage of if you end up needing it.

» Learn more: Why Does Having a Term Conversion Option Matter?