Your Guide to Life Insurance in Your 20s

Get smart and get ahead with low life insurance rates purchased in your 20s. 60-year-old you will thank you later!

When you’re 20-something it feels like life is finally starting- college graduation, launching a new career, and more exciting adventures are just beginning. While getting acclimated to ‘adulting’, it’s probably all you can do to make a budget and pay the rent.

life insurance in your 20sIf you’ve landed your first big job, you may have set up a 401k or started thinking about saving for retirement. Life insurance?

Life insurance the ultimate backup, the financial tool for planning for “what if”. Don’t make the mistake of assuming that only seniors or middle-aged couples with kids need life insurance.

Everyone needs life insurance, the trick is that it’s insanely less expensive to get as a young adult under 30 than at an older age.

Learn how you can spend a little money in your twenties to save yourself a lot of money down the road.

Who Should Get Life Insurance in Their 20’s?

1. Major Life Events

Your twenties are exciting times, full of big changes. In addition to being reasons to celebrate, major life events are also reasons to buy life insurance.

2. Getting Married

You’ve tied the knot, congratulations! You’re walking through life with a partner, and in marriage, all is shared- the joy, the responsibilities, and the burdens. You have someone that depends on you now. It’s a big shift from only having to look out for yourself.

Young adults in their twenties are often swamped with debt from students loans, car loans, and more. Federal Reserve data reports that 20-somethings owe an average balance of just over $22,000 on their student loans!

If you passed away, your spouse would inherit all of your debt. Doesn’t seem fair? You can protect your spouse by purchasing a life insurance policy to cover those expenses.

3. Starting a Family

When two becomes three life is turned upside down. Your sweet bundle becomes the center of your universe. Although, as any new parent has figured out, you realize babies are expensive! Between buying diapers, formula, and other necessities, it may sound ludicrous to add yet another monthly expense by purchasing life insurance.

Consider this: your baby or child is completely dependent on your income. If you were to die, they would need more than just enough money to cover funeral expenses, they would need money to replace that lost income you provided. A qualified life insurance representative can help you calculate the right amount of coverage for a policy, based on your unique situation.

4. Buying a House

The papers are signed, the for sale sign comes down, and the house is officially yours! Cheers! On the other hand, a mortgage is now your responsibility for the next thirty years or so.

Build a strong financial foundation by purchasing a life insurance policy that will cover at least the remaining part of your mortgage. This protects your spouse or mortgage co-signer from being seated with that burden after your passing.

Why Should You Get Life Insurance in Your 20’s

Purchasing life insurance is one of the building blocks of becoming financially stable.

Here’s a quick introduction on how life insurance works: life insurance is a contract between you and an insurer. You promise to pay monthly installments called premiums, and in exchange the insurer promises to pay out a predetermined amount of benefit to your loved ones when you die.

  • The insurer: the insurer is the party responsible for paying out claims in the case of a death, the life insurance company
  • The owner: Responsible for premium payments to the insurance company, the owner of the policy must keep up with monthly payments to keep the policy valid
  • The insured: the life insurance policy is based on the insured person’s life
  • The beneficiary: the person, or other entity that will benefit from and receive the life insurance claim when the insured dies

How Much Does Life Insurance Cost for 20 Year Olds

Let’s talk more about these premiums. Just like rates for car insurance are based on your driving record, number of tickets, DUIs, etc, rates for life insurance vary as well.

A monthly premium is based first on the total amount of the policy you wish to buy.

Then there are other key factors that affect premium rates:

How Age Affects Life Insurance Rates

This is the number one factor insurance companies look at on a life insurance application. Simply put, the older you are the more of a risk you are. Premiums rise according to age.

Taking out a policy at age 65 would mean steep premiums! At your young age, you are a very low risk and can take advantage of excellent low rates.

How Gender Affects Life Insurance Rates

After age, gender is the most important part of pricing a premium. Life insurance companies try to estimate how long someone with a specific profile will live use data and stats.

Research shows that women generally live about five years longer than men. That means they’ll end up paying premiums for a longer period of time, so females get slightly lower rates than males.

How Smoking Affects Life Insurance Rates

Obviously, smoking puts your health in jeopardy in many ways. When applying for even the most basic life insurance you’ll have to answer health history and lifestyle questions, including ones about tobacco use. It’s not unusual for smokers to pay 2 to 5 times higher rates than a nonsmoker does.

WARNING: Don’t lie about your tobacco use on a life insurance application.  Not only can this lead to denial in coverage, it can also lead to insurance fraud – a federal crime – and even lapse of policy in the event of your death, leaving your family unprotected.

How Health Affects Life Insurance Rates

For most life insurance plans, a health exam is a required part of the process. The exam is screening for height, weight, cholesterol, blood pressure and other basic data points. The healthier you are, the better the rate you will be offered.

Health History is another dimension to the complex formula that determines your premium. You maybe are in excellent in health, but has your father suffered a heart attack? Does diabetes run in the family? Insurance companies will try to predict what types of health issues you may have down the road, based on your family’s health history.

How Lifestyle and Occupation Affect Life Insurance Rates

Do you love to go bungee jumping? Are you a professional stuntman? Lifestyle and occupation questions decide what level of risk you are taking in your everyday life, whether it’s on the job or as a hobby. Simple things like your driving record may be assessed as well.

Why Should I Buy Life Insurance in My 20’s? 

Bottom line: In your twenties, you have everything working in your favor- your age, your health, your lifestyle (maybe even your gender, ladies!). You’ll never be offered a better premium rate than if you purchased life insurance this year.

It gets better: premium rates can be locked in for life. The great rate you secure now never has to change, despite any major life event or illness you may experience.

You Never Know When You May Need Life Insurance

Maybe you’re still a single and childless millennial, renting a studio with friends. Your current situation may not necessitate life insurance- but that doesn’t mean things will stay that way. Where do you see yourself in 5 or 10 years?

Life Insurance Rates Become more Expensive as You Age

Later in life you may decide to settle down, and then you’ll see the appeal of life insurance. But by that point you will have missed the opportunity to get in at the ground level and access the rock-bottom rates that 20 somethings are offered. By holding off, you will definitely face higher premiums. You really can’t afford to wait!

Life Insurance Rates for 20 Year Olds

There are two main types of life insurance to choose from, term and whole life insurance. You can buy term life insurance in increments of 10, 15, 20, 25 or 30 year terms. Most term life policies will expire at the of age 95, no matter the term period.

Your policy rate or premium will be locked in for the duration of your term. But when the term period expires, that guaranteed rate is over and so is your coverage. No death benefit will be paid if you survive the term.

Whole life insurance literally lasts your whole life. It is also called permanent life insurance because it never expires. It is more expensive than term life insurance, but in your twenties you can get a fairly low rate for much more coverage.

Unlike term life insurance, whole life builds cash value over the lifetime of the policy- if you start now, that could be a lot of cash growing tax-deferred! Whole life insurance has living benefits, and you can withdraw money from it if you want or need to.

Let’s take a look at some life insurance rates for 20 year olds:

AgePolicy TypeMale RateFemale Rate
2010 Year Term$13/mo.$12/mo.
20 Year Term$19/mo.$17/mo.
30 Year Term$30/mo.$26/mo.
Whole$152/mo.$136/mo.
2210 Year Term$13/mo.$12/mo.
20 Year Term$19/mo.$17/mo.
30 Year Term$31/mo.$26/mo.
Whole$152/mo.$136/mo.
2410 Year Term$13/mo.$12/mo.
20 Year Term$19/mo.$17/mo.
30 Year Term$31/mo.$26/mo.
Whole$152/mo.$136/mo.
2610 Year Term$13/mo.$12/mo.
20 Year Term$19/mo.$17/mo.
30 Year Term$31/mo.$26/mo.
Whole$152/mo.$136/mo.
2810 Year Term$13/mo.$12/mo.
20 Year Term$19/mo.$17/mo.
30 Year Term$31/mo.$26/mo.
Whole$152/mo.$136/mo.

Term Life Insurance Quotes for 20-29 Year Olds

When buying term life insurance at a young age, you’ll definitely want a longer term- 30 year term is a popular choice. The table above shows rates for 30 year term policies according to age and with different amounts of coverage. As you can see there’s hardly a difference between age 20-29 (hint: 30 is the magic number!) Even a $1 million dollar policy is pretty affordable!

These rates are based on non-smoking, good health. Smokers beware- A smoker is likely to pay about $36,720 more to hold life insurance over a 30 year term than his non-smoking buddy! Yikes!

Whole Life Insurance Quotes for 20-29 Years Old

Whole life insurance is certainly more expensive than term, but you get what you pay for- more benefits that never expire. For example, it would cost a 25-year old female in good health about $78 per month for a $100,000 whole life insurance policy. Compare that to the $14 per month a 25 year-old would pay on a 30-year term life insurance plan.

The trade off is this: when paying premiums on a term life insurance plan, you are doing risk management. A 30-year term will last until you’re 55 if you begin at age 35. You will have covered your risk, but you won’t see payout. When paying premiums on whole life insurance, although they are higher, the payout of benefits guaranteed.

Find the Best Life Insurance Rates for 20 Year Olds

Here’s a quick checklist to help you get the best deal as you begin to peruse your options:

  • Don’t get ripped off. There’s plenty of scams ready to take your money. Work only with reputable life insurance companies. Here are a few of the best: AIG, Mutual of Omaha, Prudential, and CIncinnati Life.
  • A smaller affordable policy is better than a larger one that’s a financial strain. Life insurance policies are only valid if you keep up with making your monthly premium payments.
  • Check out available riders and options on different policies. You can customize a life insurance policy to make it just what you need. A licensed insurance agent can help you look at possible riders and options that are unique to your situation.

The time is now! Seize this opportunity in your golden years while you’re 20-29. Purchasing life insurance isn’t difficult, and it will be the smartest financial move you can make at this age.

Confused about life insurance?  No wories, it can be difficult to understand without talking to an expert.  Give one of our agents a call today for free, and talk with them about your financial and health situation to find the best life insurance rates for you today!

Or, get started using our online quoting engine for quick and easy life insurance quotes.

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About Jeff Root

is the owner of rootfin.com. He's an independent life insurance agent who has helped 1,000's of consumers purchase life insurance online and over the phone.

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