Hollay Ghadery Last Updated On: June 27, 2023

What Is Life Insurance For Young Adults?

Life insurance for young adults is generally the same as for adults, but the reasons for purchasing it can be different. For adults, the goal of buying life insurance is usually to ensure their family is financially covered should they pass away unexpectedly. For young adults, it can be a smart way to lock in a great rate and start planning for retirement.

Understanding Life Insurance For Young Adults

The little known secret about life insurance is that the best time to buy it is, well…yesterday. It’s never going to be cheaper for you than it is now, so it makes good financial sense to purchase early. Young adults will be able to lock in at a much better rate than older people, especially if they’re healthy without any pre-existing conditions. Once your health starts to deteriorate, you become more of a risk to insurers and it’s harder to get lower premiums.

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Why Choose Life Insurance For Young Adults?

Life insurance is about so much more than the death benefit. It can be tough to think so far down the line when you’re young, but life insurance can be a great financial planning tool, if you use it right. We’ll dive into the best life insurance for young adults below, but your age can definitely work to your advantage in terms of life insurance.

Best Life Insurance For Young Adults

The best life insurance for young adults isn’t the same as it is for older adults. There are two main categories of life insurance:

  1. Whole life (permanent) insurance
  2. Term life insurance

Term life insurance is typically less expensive, but only lasts for the set term of the policy (usually 10-30 years). Whole life lasts your entire life, until you pass away, but comes with higher premiums. Whole life also comes with a cash value account, which can come in handy for young adults. 

Whole life insurance is generally the best life insurance for adults. Term life insurance only lasts a set term and then expires, and for most young adults, that term simply isn’t long enough. Whole life insurance lasts no matter how long you live, while giving you the chance to lock in lower premiums while you’re young and healthy. 

There’s another subset of permanent life insurance called universal life insurance that might be a good fit for young adults too. With universal life insurance, you can adjust the premiums based on your needs throughout your life, which is helpful when you’re young and unsure about your income and career path. 

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Benefits of Life Insurance For Young People

There are two main reasons you should purchase life insurance as early as possible: 

  1. To secure lower premiums
  2. To build cash value

Most insurance companies require a medical exam before they’ll insure you, which means you could end up paying more if you have any health conditions. Securing a lower rate before any conditions develop will save you a ton on premiums down the line. Once you have life insurance, your coverage can’t be cancelled unless you default on the premiums, so securing life insurance while you’re young and healthy can save you a lot of headaches when you’re older. 

Another main reason to purchase life insurance policies for young adults is the saving component. If you’re not disciplined about saving for retirement, this can be a smart choice for you. Whole life insurance comes with a cash value account, meaning part of your premiums go towards an investment account that builds as you get older. 

As with all investments, the more time you have to let that cash value account grow, the better it is. Buying life insurance as a young adult gives you maximum time to let that account grow and build you significant savings for retirement or to borrow against or draw from while you’re still alive. 

Affordable Life Insurance For Young Adults

While whole life insurance is generally more expensive than term life insurance, you will be paying premiums for a longer period of time, which works in your favour. Insurance providers can afford to give you lower rates as opposed to someone in their 50s or 60s.

With whole life insurance, you also don’t need to worry about the premiums increasing as you get older. Once you lock in that low rate as a young adult, you’re set.

On top of this, you can also find ways to save on your insurance premiums to make the payments more manageable:

  • Bundle multiple insurance policies with one provider (such as car and life insurance) to get a volume discount
  • Taking a medical exam can net you a lower rate if you’re healthy, since there’s less risk for the insurance provider. A no-exam life insurance policy tends to be more expensive.
  • Compare quotes from multiple providers. Each provider calculates the premiums for individuals differently, so you’re bound to find the best rate and policy for you by reaching out to multiple providers.

These tips, combined with purchasing life insurance at a young age, will help you keep your premiums down over the years for affordable life insurance.

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Is Life Insurance For Young Adults Right For You?

Life insurance makes sense for most people, but there are situations where it might not be the right fit.
  • Dependents: Many choose life insurance in order to leave their children a lump sum or to ensure their dependents are covered financially. If you’re set on never having children, you may not see the benefits of life insurance for young adults. If you’re on the fence, it might still make sense to secure lower premiums in case you change your mind down the line.
  • Financial situation: If you have no debts and great savings, you might not want life insurance or would prefer to invest your money in a different vehicle. On the flip side, if you’re strapped for cash, adding a monthly life insurance premium might not make the most financial sense for you right now.
  • Health: If your family has a history of chronic or genetic illness, it makes sense to secure life insurance before it develops and becomes too hard or costly to qualify for life insurance. If it’s already begun developing, it might make sense not to start paying costly premiums from a young age.
Life insurance isn’t for everyone, and you don’t want to be stuck paying premiums if it doesn’t add value to your life or give you peace of mind. Make sure life insurance is the right fit for you before purchasing.

In Short: Life Insurance For Young Adults

While it might feel morbid to think about life insurance when you’re in your prime, it can seriously benefit you in the long run. While it might not feel like a priority now (especially while you’re still building up your income), it can net you significant savings down the line and help set you up financially for your future.


You can get life insurance as early as age 18 and at any point after that. The best time to buy life insurance for young adults is in your 20s and 30s, since it will be the most cost effective time to buy.

While you might not have dependents now, you could later in life so it makes sense to set yourself up for that now just in case. If you never have dependents, you can still choose to donate your benefit to a charity or elsewhere.

Whole life insurance is generally the best form of life insurance for young adults because it lasts your entire life and gives you a savings vehicle. Term life insurance is a great option, but it can be tough to know what length of term to choose and if it will be long enough.


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