The Cost Is Probably Lower Than You Think
Here's a contradiction: According to recent research, 68% of adults under age 40 believe life insurance is essential to a healthy financial future. Yet only about half of young adults actually own it.
So what's the disconnect? Many young people tell themselves they don't need coverage yet. They're healthy. They don't have kids. They're not making major money. It doesn’t seem necessary yet.
The biggest problem with waiting is that you might miss out on the best time to get a great policy at a lower premium. Life insurance doesn't work the way you probably think it does. In fact, the real barriers keeping young adults from getting coverage might not be what you’d imagine.
What You Think It Costs vs. What It Really Costs
Here's what might surprise you: When a survey by LIMRA/Life Happens asked healthy adults between 18 and 30 to estimate the cost of a $250,000 term life insurance policy, their median guesses were
10 to 12 times higher than the actual price.
So do the math. That’s the difference between thinking a policy costs $200 a month and discovering it actually costs $15 to $20.
Term life insurance—the most affordable option for young people—is genuinely inexpensive when you're young and healthy. The cost does vary based on individual factors like age, health, smoking status, coverage amount, and the like, but the fundamental principle is simple: younger, healthier people pose less risk to insurers, so they pay a whole lot less.
So, if there’s one thing you take away from this, it’s to go get some quotes before you decide you can't afford life insurance. Your assumptions may be inflated.
Who Actually Needs Life Insurance, Though?
You may have imagined life insurance as something for parents or high earners who are protecting their families. But financial dependence isn't limited to spouses and kids. Consider the following scenarios:
Do you have a partner you live with? That means you share rent, utilities, insurance, maybe even a car payment. If something happened to you, they'd face a real financial squeeze.
Did anyone co-sign a loan for you? Your parents might be liable for student loan debt if you died. Depending on their financial situation, that could be a serious hardship for them.
Would someone need to cover your funeral? Funeral and burial expenses average $7,000 to $12,000. If that's not in your savings, it becomes someone else's problem.
Do you help support a family member? Maybe you give money to a parent, contribute to a sibling's education, or help with groceries for an elderly relative. That support matters financially, and would disappear if you were no longer providing.
What about your employer coverage? Many young people have workplace life insurance but don't realize that employer coverage usually terminates when you leave a job, and you can't take it with you.
These are very commonplace situations that many adults in their 20s and 30s are in, without always recognizing the implications.
Your Health Today Determines Your Options Tomorrow
Here's another reason not to put off life insurance: aging. When you apply for life insurance, insurers evaluate your age, health, lifestyle and risk factors to determine whether they'll cover you and what you'll pay. The underwriting process can be fast, as some insurers offer expedited approval without a medical exam for eligible applicants. But the baseline depends on your current health status.
While it’s not true for all, it’s true for many that the younger you are, the healthier. If your health changes down the road (even something relatively minor), you might not qualify for a policy at all, or you'd pay significantly more in monthly premiums.
Ultimately, being young and healthy isn't a reason to skip life insurance. It's actually one of the best reasons to explore it. You're shopping from a position of strength: lower premiums, easier approval, more options.
How Much Do You Actually Need?
Start here: Who depends on you financially, and how much would they need if you weren't here to contribute?
Include:
- Outstanding debts (student loans, car payments, credit cards, mortgage)
- Shared living expenses where your absence would create a gap
- Final expenses (funeral, medical bills)
- Income replacement for someone who depends on your paycheck, even partially
- Any employer coverage and whether it's truly portable
From there, calculate a reasonable amount. For many young adults, that's somewhere between $250,000 and $500,000, and for some it may be as low as $75,000.
A practical tip: Term life insurance provides coverage for a specific period (10, 20, or 30 years). It's ideal when you want protection for a defined stage of life, like while you're paying off student loans or until your kids finish college. Once the term ends, you can renew, convert, or let it lapse, depending on your situation then.
The Real Reason to Act Now
Life insurance is all about protecting those you care about from financial stress in case the worst does happen. If you're young, healthy and just starting to build your financial life, now may actually be the ideal time to explore coverage because you'll pay less and have more options. And you can take care of a financial unknown before life gets more complicated. Your future self will definitely thank you.
Start by looking into it. Get a few quotes from different insurers and see what some policies actually cost. Find out whether your employer coverage is portable. Understand the difference between term and permanent insurance and which makes sense for you right now.
Then make an intentional decision based on those facts. You might discover you do need separate coverage. Or, you might find that your employer policy is enough for now, in which case maybe you reassess in three years.
Feel free to reach out if you’d like to talk it through or need help getting quotes and understanding how different policies work. We are here to help!
Life insurance products, availability, underwriting requirements, premiums and benefits vary by insurer and individual circumstances.
