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There’s no one perfect age to buy life insurance. It all depends on your life circumstances and future goals. That being said, however, the younger you are the more affordable life insurance is.

If you’re in your 20s and life insurance is already on your mind, good for you. Planning ahead isn’t a bad thing.

Term Life Insurance in Your 20s

Term life insurance is the most affordable type of life insurance, no matter your age. It’s designed to provide financial protection during a certain period of time, called a term. These terms typically range from 10-40 years. If you die within this period of time, your beneficiaries receive the coverage amount (the death benefit).

Since the coverage is limited to this time period, it’s wise to make sure you buy a policy when it makes sense. If you’re 21 years old, are in college, don’t have a long-term partner and no children, it might not be necessary to buy a life insurance policy quite yet. You’re probably on a pretty tight budget. Even though the term life insurance policy premiums will likely be under $20 per month for you, you may be better off putting that $20 in a savings account.

However, if you’re a young, financially-stable adult that wants to get married and start a family soon, by all means, take advantage of the low rates and buy a policy now. With term life insurance, your premiums are fixed, meaning they won’t increase the entire duration of your policy. You can even lock in that low monthly rate for 40 years if you really want to.

Sample Monthly Quotes for a $250,000 Term Life Insurance Policy

20-Year-Old Male, Healthy Non-Smoker

Term Length Monthly Premium
10-year $11.90
15-year $11.90
20-year $12.36
25-year $15.62
30-year $17.72
35-year $22.08
40-year $24.93

It’s also important to note that buying a policy now doesn’t mean you can’t buy another policy in the future.

Example:

John is 23 years old and just graduated college. His and his high school sweetheart are getting married at the end of the summer. 

John buys a $100,000 20-year term life insurance policy for $9.15 per month.

John wants to make sure his soon-to-be-wife is financially protected while they build their futures together. If he dies unexpectedly prior to age 43, his wife receives a check for $100,000. She can use this money toward a funeral, rent, bills, etc.

John is now 35 years old. He and his wife have two children and a mortgage. He decides to buy a second life insurance policy.

John buys a $500,000 30-year term life insurance policy for $35.24 per month. His first policy terminates in 8 years, but this policy provides protection until he reaches his retirement years.

If you buy a term life insurance policy when you’re in your 20s, one thing to make sure your policy has is a term conversion option. This allows you to convert your term policy to a permanent life insurance policy.

This option is beneficial to have because our future is unknown. A conversion option is guaranteed insurability no matter your health. Even if you’re diagnosed with cancer five years after buying your term life policy, you can convert to a permanent policy which provides financial protection for your loved ones your entire life.

A conversion option is free. They don’t cost extra to have on your policy. However, your premiums will increase quite a bit when you convert because permanent life insurance is much more expensive than term.

Having a conversion option doesn’t mean you’re required to convert in the future. It’s just an option for you to take advantage of if you end up needing it.

» Learn more: Why Does Having a Term Conversion Option Matter?

If you’re in your 20s and life insurance is already on your mind, good for you. Planning ahead isn’t a bad thing.

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Whole Life Insurance in Your 20s

Whole life insurance is a type of permanent life insurance. It’s designed to last your entire lifetime, accumulate cash value, and some also pay dividends. These policies cost much more than term life insurance.

If you’re already financially stable, contributing to IRAs and savings accounts, and still have extra money to contribute somewhere, then looking at buying a whole life insurance policy may be very beneficial for your future.

Like term life insurance, whole life insurance premiums are fixed and won’t increase as you age. Buying a whole life insurance policy in your 20s, and locking in that low price, can allow your cash value account to grow to substantial amounts over time thanks to compounding interest. This cash value grows tax-deferred and you can access it while you’re alive through policy loans and withdrawals.

The longer you let the cash value account grow untouched, the more you’ll accumulate. Buying a policy in your 20s and not touching it until you retire can certainly allow you to enjoy your golden years.

Typically, whole life insurance is a good option if you’re already maxing out your 401(k) and IRA contributions. If you’re not there in your life yet, whole life insurance may not be the right choice. Be sure to talk with a financial advisor if you’re considering buying a whole life insurance policy in your 20s.

If you’re interested in a whole life insurance policy, pop on over to our information page: Whole Life Insurance. You can also fill out our contact form to receive customized quotes. An agent will review your circumstances and goals and can help you decide if whole life insurance is a good option. Our agents here at Quotacy don’t work on commission and are advocates for you, not the insurance companies.

Term life insurance is far less complex and you can get quotes instantly on our website without even giving away any contact information. If you’re ready to buy a term policy, apply online in less than ten minutes. Your dedicated Quotacy agent will keep you updated as your application moves through the life insurance buying process. Pop over to this page for more information on term life insurance and to run quotes: Term Life Insurance.

Note: Life insurance quotes used in this article accurate as of September 9, 2020. These are only estimates and your life insurance costs may be higher or lower.

Image credit to: Sharon McCutcheon

About the writer

Headshot of Natasha Cornelius, a life insurance writer, for Quotacy, Inc.

Natasha Cornelius

Marketing Content Manager

Natasha is a writer and content editor at Quotacy. She is also co-host of Quotacy’s YouTube series. She can't get enough of life insurance and outside of work is also working toward her Chartered Life Underwriter designation. Connect with her on LinkedIn.