Cheap Life Insurance for Young Adults

Save on Life Insurance for Young Adults

Many people rarely consider life insurance while in their twenties because they mistakenly believe it is only something their parents buy to protect themselves in case one of them dies so the surviving spouse is not saddled with paying all the expenses of raising a family.

Even though you may not be married, and maybe marriage is not part of your plans for the future, your death would still have a financial impact on your loved ones, including your final expenses and debts.

Plus, there are a number of benefits you gain by purchasing life insurance at a young age.

First, if you were to buy life insurance today, it would likely ensure that you would be eligible for insurance in the future even if the state of your health changes. 

That means, even if you develop a health condition later on, you may still continue your insurance and even add to your coverage in the future, if needed.

Second, the older you get the more expensive a life insurance policy becomes. 

However, the opposite is usually true if you buy now.

With term life insurance plans, you can lock-in a low rate now and have it guaranteed to remain the same for the life of your policy, which may be up to 30 years.

If you are single, don't overlook the need for life insurance. 

Why You’re Not Too Young for Life Insurance Protection

When you’re just a few years out of college and have a mountain of student loans to pay off, one of the last things on your mind is: I need to buy life insurance coverage. 

You’re doing the things people do at a young age, trying to meet basic monthly living expenses and maybe setting up your first 401K plan, and it can be tough to justify any additional expenses on a regular basis. 

You may even think that life insurance is only for recent parents or mid-aged people with a ton of financial obligations including a mortgage, car loans and the cost of raising a family and putting kids through college.

But, young adults are in the very best position when it comes to purchasing a life insurance policy. The cost of life insurance when you’re young is usually much lower than it will be later on in life, so you can lock-in a much better deal by purchasing coverage now.

What Does Life Insurance Do for Young Adults?

There are different types of life insurance that can accomplish different things for you.

Permanent life insurance never expires as long as you keep your payments up to date — in other words, the coverage lasts for your entire life, no matter how long you live. 

In addition to the guaranteed money your beneficiaries will receive when you pass away, whole life comes with an added financial benefit that you can use during your life, known as cash value.

Whole life insurance grows cash value inside your policy over your lifetime and provides insurance protection now while also building cash value each year. 

Your cash value isn’t impacted by market fluctuations — so it will be there when you need it. You’re doing this while maintaining the lasting financial protection of life insurance, and most importantly, it’s insurance that won’t ever expire as long as you make the premium payments. 

And, if needed, you may take a loan from the cash value in your permanent life insurance policy.

Your beneficiaries will get that money when you’re no longer here. They are paid the death benefits from your policy upon your passing.

Term life insurance is another type of life insurance available that offers very affordable rates.

With term life, the financial coverage lasts for a set duration — the term — which can range up to 30 years. Many insurers offer a term of 5, 10, 15, 20, 25 of 30 years. The longer your term, the higher your annual cost of life insurance.

It’s initially more affordable and does offer your loved ones a form of financial protection.  

However, term has certain disadvantages. 

It lacks a cash value benefit and when your pre-agreed term is up, the life insurance coverage is up, too. That’s why term insurance is so cheap, and affordable for almost any budget.

While it provides financial cover if you pass away before your term is over, when this coverage ends you have no asset.  

However, life insurance is not an investment, it is financial protection. So, if you need the best deal on coverage for a period of 30 years or less, then term life may be the best option.

To renew term life insurance when you’re older will almost certainly cost much more and involve taking a medical exam.

However, some term life policies offer guaranteed renewability which means you would not be required to take an exam to qualify for renewal of your existing term insurance policy.

Many people have both term and permanent life insurance coverage for optimal protection. Term life for their short term needs until the home is paid off and the kids are grown, and permanent insurance to provide for their final expenses, if they don’t have enough money saved up yet.

 

Is It More Affordable to Buy Life Insurance When I’m Young?

Your life insurance premiums will increase as your life expectancy decreases. This means the older you get the more life insurance is going to cost you. 

Whether you buy permanent insurance or term life insurance, it will usually cost you less while you're young. 

If you're at a high risk for a medical condition that might make it too expensive or impossible for you to get insured for life insurance later in life (for example, a family history of cancer), consider buying a life insurance policy while you're still young and in good health. 

If you buy term life insurance, ask about a renewability provision. 

Although your premiums may increase at renewal time because your life expectancy is shorter, you'll be able to renew your life insurance policy without having to prove your insurability again, which means, you won't have to take a physical exam to qualify for the renewal policy. 

Keep in mind several factors affect the cost of your life insurance policy, including your current health, whether or not you are a smoker, your lifestyle, occupation and hobbies, and any pre-existing medical conditions; as well as, your driving record and height-to-weight ratio, among other things.

 

The Advantage of Youth for Life Insurance

For a 20-year term life policy, which costs less than whole life insurance, what you can save by signing up when you’re young could pay for a new upgrade on your iPhone every year. 

In addition, based on the principle of future insurability, you may be able to protect your insurability and add more coverage as you go through life stages — without having to go through that proof of health process again. 

In short, your health assessment remains "locked-in" for the duration of the policy. 

On the other hand, if you forget the issue and apply for a new life insurance policy later on in life, you may be required to take a medical exam and could be denied for a number of reasons from occupation to known health history.

People tend to be less healthy as they age, so if you have any worries on that score, it makes more sense to lock-in an affordable life insurance plan early on.

 

Caring for Your Loved Ones

Second, if you pass away and don’t have life insurance, some costs could be a financial burden on your family members. 

For example, the average cost of a funeral is $7,000 - $10,000.  

And if anyone, like a parent, has co-signed for loans or other types of debt you have — including some student loans or a car loan — that person could be responsible for the debt, or related taxes. 

In addition, if you’re married and live in one of these states — Arizona, California, Idaho, Louisiana, New Mexico, Texas, Washington or Wisconsin — your spouse could be on the hook for any debts you leave behind when you die.

Planning for Your Future

So How Much Life Insurance Coverage Do You Need? 

By one estimate, people in their 30’s should own 30 times their annual income in life insurance protection — approximately the number of years of work ahead in their lifetime. 

That may seem a bit steep as you’re just starting out. 

You can consider starting with a term life policy that can be converted to a whole life insurance policy down the road. 

But when you have so much ahead of you — career, partner, children, home… really, everything — shouldn’t you consider protecting yourself and your family accordingly?

Make sure you consider the following:

• Type – Which type of life insurance is right for you: Term or Permanent?
• Amount – Use a life insurance calculator to determine how much coverage to buy.
• Price – Compare pricing among several of the best life insurance carriers.
• Premium Payment Options – Consider paying your premiums annually (once per year) to save money instead of monthly premiums payments which include a finance charge.
• Duration – Select a "term" of coverage that meets your needs.
• Goal – Consider your future financial goals when selecting your life insurance plan.

 

Reasons to Buy Life Insurance as a Young Adult

• Student Loan 
• Auto Loan 
• Married
• Health Issues
• Starting a Family
• Buying a Home

 

Who Can Purchase Young Adult Life Insurance?

You, as an adult may purchase life insurance on yourself.

Parents, grandparents or permanent legal guardians can usually apply for life insurance for the teen in their family. 

The parent, grandparent or permanent legal guardian who applies will be the policy owner and may transfer ownership of the policy to the teen when the teenager reaches age 21.

 

Best Cheap Life Insurance Companies for Young Adults 

New York Life, Transamerica and Amica Life are three of the most competitive insurance companies offering affordable life insurance policies for young adults.

 

Life Insurance Quotes

  

Top Pick – JRC Insurance Group

JRC Insurance Group helps you shop, compare and save on life insurance. Regardless of your age or health background, we'll shop our 40+ life insurance companies and find you affordable life insurance you need to protect your family and fit your budget. Compare the best life insurance rates for savings up to 73%. Get Your FREE Quote.

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