Life Insurance for Young Adults

Last Updated on June 5, 2024

Getting life insurance as a young adult tends to get slept on at times. This is because the unpredictability of life doesn’t hit just yet, as most young adults tend to be healthy, unmarried, and don’t have family members that depend on them. Furthermore, young adults tend to have many more pressing expenses, so naturally, life insurance is low on the list of priorities.

However, life insurance provides various benefits that make it ideal for anyone, regardless of their circumstances. After all, life insurance provides protection and security, ensuring financial assistance for your loved ones after you’ve left.  In this day and age, the type of riders that companies offer such as living benefit riders can provide value no matter what your age is.

But no matter how busy a person is, it’s imperative to make sure that you have life insurance in place.  You would be surprised how quickly a person can be approved for life insurance on a non-medical exam basis.  Some people, even if you have Diabetes, can be approved in just a few days.

Being financially responsible is a part of life, but you may be wondering why young adults should even consider life insurance when they likely don’t have a family to take care of. Not to worry, we have you sorted out. This article will look at 5 reasons why it’s important for young adults to consider life insurance. Without further delay, let’s get into it.

1. Get cheaper life insurance rates and lower costs

You get several cost advantages for starting early when it comes to life insurance. For starters, it will help reduce the insurance premiums you have to pay during the term of your coverage. Insurance premiums refer to the payments you must pay to avail of the insurance policy. These premiums can be monthly, yearly, and half-yearly, depending on the life insurance plan that you have opted for. These premiums are calculated based on many factors, such as:

• Age
• Medical History
• Income (may need documentation like a paycheck stub for higher amounts of coverage)
• Weight and Height
• Lifestyle habits such as tobacco use
• Dependents and marital status

Generally, if a person is older, they are a more considerable liability to the insurance company since they will be much less healthy and have more health problems. As a result, their premiums will be higher.  In regards to your diabetes history, people with type 1 will pay higher rates compared to a person living with type 2 diabetes.

However, you will be much healthier as a young adult, meaning you can easily qualify for lower premium rates. Your premium will remain the same throughout the plan, meaning these low premium rates will exist even when you have gone well into your 30s. So let’s say you are 25 years old, and get a 15-year life insurance plan. This way, even when you are 40, you will still pay the same premiums you started with at 25.

Or if you would wait to apply until you are age 40, your rates would be considerably higher.  Why?  Because you’re older, and companies will adjust your rates accordingly.

Simply stated, the younger you are at the time of applying for life insurance, the ‘lower’ your premiums will be.  Your age at the time of completing the application is a major determining factor in what premiums you’ll pay.

2.Protect your family, spouse, and children

As a young adult, you may not have a family dependent on you, but you may likely want one in the future. You may be planning to get married and have children, meaning if you get a plan now, you can plan worry-free regarding your future family. You may also be already committed to a long-term partner and simply waiting for the right time to tie the knot or start a family with them. If so, definitely explore getting a policy to lock in your premiums for an extended period of time.

Whatever the case, taking care of a family can be stressful because of the expenses and uncertainty. Having life insurance will make you feel at peace, knowing that your surviving kids and wife will be able to have more financial security. Your parents can benefit from life insurance even if you do not have a future family. Parents tend to get old with age, and you may feel better knowing you are leaving them cared for if something happens to you.

With life insurance, you can always update your beneficiaries.  As your life changes, it’s important to make sure your policy is updated with the proper beneficiary. Also if you have student loans or other types of installment debt, it may make sense to secure a policy.

3.Option to add more coverage at lower rates in the future

Your lifestyle will likely change as your life insurance plan progresses from when you are a young adult. After all, getting married, having children, and growing old will all impact your lifestyle. Such lifestyle habits could affect your health, or you may want certain coverages added to your plan for extra security. Whatever the case, your lifestyle habits may lead to you wanting to add more coverage or reviewing your plan after consulting your spouse.

Adding more coverage leads to extra costs, which can be challenging if your premiums are already high. However, if you get your life insurance plan at a young age, you will have lower premiums and the option to add extra coverage at a lower cost. In this way, you will be able to avail the additional benefits your plan provides in the future if the need arises. These benefits are generally known as riders. An example of extra riders that life insurance holders opt for with additional coverage includes accidental death, long-term care, and guaranteed insurability riders.

A person is never limited to owning just one life insurance policy.  As your life changes, so should your life insurance portfolio.  Stacking or ‘laddering policies’ is a popular strategy for lots of consumers.

4.Take advantage of additional plan benefits

Nowadays, there are many life insurance companies out there that provide a variety of plans. Some of these plans offer additional benefits alongside financial security for your loved ones that benefit you in your life and unexpected situations. This includes coverage of hospital fees, medical care, and surgery in case of accidents, disabilities, or critical illnesses. Having such coverage can be a lifesaver for you, as health issues and accidents can occur anytime, even at a young age.

This coverage will allow you to pay for healthcare by reducing or covering the costs, giving you peace of mind about your health. In particular, such coverage can be beneficial if you are diagnosed with an early critical illness, like dementia, cancer, heart issues, etc. Managing these illnesses as early as possible will ensure you can recover quickly and live healthily for the rest of your life. Additional plan benefits will provide you with the monetary help you need to ensure that you won’t have to scrounge up money at an early age. You will be able to live as healthy a life as possible.

Every life insurance company has different offerings, and options on their policy features.  It’s extremely important to make sure you choose an insurance company whose policies provide the most flexibility in how a policy can be used.  There are countless ways how a life insurance policy can protect you.

5.Help cosigners clear student debt if you pass

College education and university fees tend to be incredibly high, which means that most students and young adults tend to have student loan debt. This debt can be exceptionally high, and it can take quite a while to whittle it down until it is cleared. Furthermore, if god forbid you to pass away, these loans do not go away unless they are federal student loans. This means that the responsibility of the student loan is then passed onto your cosigners, who will most likely be your loved ones.

These cosigners will likely be your parents since you might not be married as a young adult. This means there will be a lot of financial pressure on your parents, who are likely at an age where they are close to retirement and may not be able to deal with the debt. However, with life insurance, your loved ones can get financial help in such a case, allowing them to deal with the assumed debt and clear it. You will provide them with financial stability and save them tens of thousands of dollars.

In conclusion

Life insurance is generally considered ideal only for adults who are married with children or have many dependents. However, as we have seen in this article, that does not have to be true. Young adults can benefit greatly from life insurance as they can get low premiums and more coverage at lower rates because they get their plan early. This is because insurance companies see young adults as less of a liability because of their age and fewer health risks.

They can also protect their future family as, at this age, they will likely be looking to get married and have children. Additionally, life insurance plans have become quite varied and have additional benefits that could assist you in life, such as covering health and accident costs. Finally, you can help your loved ones clear their student loan debt or other forms of debt if you pass away.

We hope this article has been insightful and has shown you why it’s important that young adults consider life insurance.  If you have any questions or needs, we encourage you to contact us for further assistance.  Or feel free to visit our Frequently Asked Questions page as this resource may be helpful.