Life Insurance in Your 20s: Why Starting Early Pays Off
Most people in their 20s figure life insurance is something to deal with later, when they are older, married, or have kids. That thinking tends to cost money. Your 20s are one of the best times to get covered, and here is why.
Why your 20s are the best time to buy
Life insurance premiums are based mostly on two things, your age and your health. Both are usually at their best right now. Every year you wait, your premium goes up, even if your health stays the same. And if your health changes before you get covered, you could face higher rates or be declined.
A healthy 25 year old can often lock in $500,000 of Term Life for around $18 to $22 a month. The same coverage at 35 runs about $30 to $40, and at 45 about $70 to $100. These figures are illustrative, but the pattern holds: buying earlier tends to save you money over the life of the policy.
How much does it actually cost in your 20s?
Here are sample monthly rates for a healthy non-tobacco applicant buying a 20 year Term Life policy:
| Age | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|
| 25 | around $12/mo | around $20/mo | around $35/mo |
| 28 | around $14/mo | around $23/mo | around $40/mo |
| 30 | around $16/mo | around $28/mo | around $48/mo |
Sample rates for illustration only. Actual rates vary by carrier, health, tobacco use, and state.
But no one depends on me yet
This is the most common objection, and it misses a few things:
- Student loans. If a parent co-signed your student loans, they could be responsible for that debt if you pass away. Coverage protects them.
- Future insurability. Health can change at any time. Getting covered now protects your ability to have coverage later, before any health issue appears.
- Locking in low rates. The policy you buy at 25 keeps those low rates for the whole term, even when you are 40 with a mortgage and kids.
- Building cash value early. With a permanent policy like Whole Life or IUL, starting in your 20s gives you decades of tax-advantaged cash value growth.
What type of coverage makes sense in your 20s?
Term Life, best for most 20-somethings
A 20 or 30 year Term Life policy locks in low rates and provides substantial coverage for a very affordable monthly cost. It covers your peak earning and family-building years without straining your budget.
IUL, best for long-term wealth building
If you want coverage plus a savings component, an IUL started in your 20s has 30 to 40 years to build tax-advantaged cash value. The earlier you start, the more it can do as a long-term planning tool.
Whole Life, best for steady, guaranteed growth
A small Whole Life policy started in your 20s at low rates offers guaranteed cash value growth for life. Some parents even start Whole Life policies for their children for the same reason.
Next steps
The earlier you start, the more your age and health work in your favor. A licensed Eterna agent can walk you through your options, and many young, healthy applicants can be approved quickly. To size your coverage, see how much life insurance you actually need.
Common questions
Should I get life insurance in my 20s?
How much does life insurance cost in your 20s?
What type of life insurance is best in your 20s?
Do I need life insurance if I am single with no children?
Start Early and Lock In Your Rate
A licensed Eterna agent can help you find the right coverage while your rates are at their lowest. No pressure and no jargon, just clear answers.
Learn More with a Licensed AgentThis article is educational and is not financial, tax, or legal advice, and it is not an offer or recommendation to buy any product. Rates shown are illustrative and vary by age, health, tobacco use, carrier, and state. Permanent policies such as Whole Life and IUL involve fees and charges, and any guarantees are based on the claims-paying ability of the issuing insurer. Speak with a licensed professional about your situation before acting. Eterna Insurance Solutions is licensed in all 50 states.