Most people in their twenties and early thirties don’t give life insurance much thought—and why would they? You’re young, healthy, and (hopefully) have your whole life ahead of you. The thought of “what happens after I’m gone” feels far away, like something for your future self to worry about. But here’s the truth: getting life insurance when you’re young is one of the smartest financial decisions you can make.
While it’s not as flashy as investing in stocks or saving for that trip to Bali, life insurance lays the groundwork for long-term financial security—for both you and the people who rely on you. And if you’re thinking, “But I don’t have kids yet,” that’s fine, because life insurance can still work in your favor in ways you might not expect.
Let’s break down why buying life insurance early is such a game changer, the types you should know about, and which ones are best suited for young adults.
Reasons to buy life insurance when you’re young
1. You lock in lower premiums
Life insurance premiums are based on risk—height, weight, and whether you smoke, are only some of the factors that are taken into consideration when applying for life insurance. The healthier you are, the less of a risk you pose to insurance companies. That means that you can lock in significantly lower monthly or annual rates now.
For example, a healthy 25-year-old might pay around $15-$20 a month for a term policy worth $250,000. Wait until age 40, and that same coverage could cost twice as much, if not more. Buying early doesn’t just save you money—it freezes those low premiums while your health is at its peak. Even if you develop a medical condition later, your locked-in policy remains in effect without a premium increase.
2. You build a safety net for loved ones
Even if you’re single or child-free, you might still have people who depend on you—financially or in other capacities. Maybe it’s your parents, a partner, or siblings. Life insurance ensures that if something unexpected happens, they won’t have to shoulder financial burdens such as private student loans, funeral expenses, or shared debts.
For young families, the impact is likely even greater. If you’re married or planning to start a family soon, life insurance can help your partner cover the mortgage, daycare, and daily expenses if you’re no longer there to contribute. In that sense, life insurance isn’t really about you—it’s about protecting the people you care most about.
3. It can help you pay off debts
Contrary to popular belief, not all debt disappears when you do. Private student loans, credit card balances, and car loans can sometimes become the responsibility of co-signers or family members.
Having a life insurance policy ensures your loved ones aren’t left footing the bill for your financial obligations. For example, if your parents co-signed your private student loans, your life insurance payout could clear that debt instantly—saving them from a potentially overwhelming financial blow.
4. You can use it to build wealth
Certain types of life insurance, such as whole life universal life policies, have a cash value component. Think of it as a hybrid between insurance and a savings or investment account. As you pay your premiums, part of that money accumulates in a cash-value fund that grows over time.
You can borrow against it, use it to supplement retirement income, or even cash it out later. The earlier you start one of these policies the more time that cash value has to grow—making life insurance a surprising tool in building long-term wealth.
5. It’s easier to quantify when you’re young and healthy
When applying for life insurance, insurers access your health, lifestyle, and medical history to determine your eligibility and premiums. Age plays a major role. Getting insured in your twenties or thirties is usually a breeze—minimal health issues, fewer medications, and lower risk factors all work in your favor. Waiting until later in life could mean medical exams, higher premiums, or even potential denial if you’ve developed chronic conditions. In short, your future self will thank you for applying early.
6. It complements your financial goals
If you’re serious about building a secure financial future, life insurance fits neatly into that plan. It’s a safety net that ensures everything else—your investments, savings, and long-term goals don’t unravel due to an unforeseen tragedy.
Additionally, many employers offer group life insurance through benefits packages. However, these policies often provide limited coverage, typically one or two times your annual salary. Supplementing that with your own policy would ensure that you’re adequately covered, especially as your income and responsibilities grow.
It's also a good idea to brush up on why you should begin these good financial practices while you’re young.
Types of insurance
Before choosing a policy, it’s important to understand the main types available and how they differ.
1. Term life insurance
Term life insurance is pretty straightforward—it covers you for a specific period (typically about 10, 20 or 30 years). If you pass away during that term, your beneficiaries receive the payout. If you outlive it, however, the policy expires
It’s affordable, simple, and ideal for most young adults who want solid protection without breaking the bank. Because of its low cost and high coverage potential, term life insurance is often the go-to choice for young people in their 20’s and 30’s.
2. Whole life insurance
Whole life insurance provides lifetime coverage and includes a cash value component that grows over time. Premiums are higher than term life, but part of what you pay goes toward building equity that you can borrow against or withdraw. It’s a good choice if you want permanent protection and are interested in using life insurance as a long-term financial tool.
3. Universal life insurance
Universal life insurance is essentially a more flexible version of whole life. You can adjust your premiums and death benefits as your financial situation changes. It also accumulates cash value, which earns interest based on market rates. This type of policy will likely work best for those who want lifelong coverage but also the ability to modify their plan over time.
4. Variable life insurance
Variable life insurance lets you invest your cash value into sub-accounts similar to mutual funds. This offers higher growth potential but also higher risk. It’s better suited for financially savvy individuals who are comfortable with market fluctuations.
What’s the best life insurance to purchase for young adults?
While there’s no one-size-fits-all answer, the best life insurance for most young adults depends on your financial goals, health, and lifestyle.
Here’s a more nuanced breakdown to help you come to a decision:
If you’re on a budget or just starting out:
Go with term life insurance. It’s affordable, easy to understand, and gives you plenty of coverage for minimal cost. For instance, a 25 year-old can often get a $500,000, 20-year term policy for less than the cost of a few streaming subscriptions per month.
If you want long-term stability and savings growth:
Consider going with a whole life insurance policy. While it’s more expensive, it offers lifelong coverage and builds cash value you can tap into later. Think of it as both protection and an investment rolled into one.
If you want flexibility:
Universal life insurance gives you the option to adjust your payments or coverage as your needs evolve—perfect if you anticipate career growth, home ownership, or children in the near future.
If you’re a high earner or investor:
Variable life insurance could be appealing if you’re comfortable taking on some risk to grow your policy’s value faster through investment.
Wrapping up our take on getting life insurance when you’re young
Buying life insurance when you’re young might not feel urgent—but that’s exactly why it’s the right time to do it. The best time to secure protection for your future is before you think you need it. The peace of mind that comes with knowing your loved ones will be cared for, debts won’t become someone else’s problem, and your financial legacy is protected is extremely invaluable. Additionally, by starting early, you lock in low rates, build long-term value, and create a foundation for financial security that will only grow stronger with time.
So before life gets busier—before the house, the kids, the nice new car or even before that new subscription to HBO Max, take a moment to plan for your future. Getting life insurance now isn’t just a smart move, it’s one of the most responsible investments in yourself and your loved ones that you can possibly ever make.
