Life Insurance For Young Adults, Reasons To Buy In 2025
Life insurance is an important consideration for young people, but it can be difficult to understand the benefits and costs of different plans.
Many companies offer life insurance for young adults, making it a good time to get a policy. They have lower premiums than traditional life insurance plans because you are considered less risky for insurers, given your age and health status.
Life Insurance For A Young Person Summary:
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Why it’s worth considering this type of cover:
- Buying life insurance in your 20s or early 30s is cheaper as premiums are based on age and health, so getting covered while you’re young and healthy locks in lower rates for the entire term.
- Younger people have an average of £27,900 in non-mortgage-related debt. Also, because some student loan debt persists after death, life insurance can help prevent those costs from burdening loved ones.
- The average UK funeral costs between £4,000 and £7,000. Even a modest life insurance policy can cover these costs and prevent additional financial stress for your loved ones..
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Insurance Hero offers a comprehensive range of life insurance policies for young people. The cover is much cheaper than you might think, and there is no obligation to proceed after getting a free quote.
Life Insurance in Your 20s – Is It Worth It?
| Factor | Description |
|---|---|
| Premium Stability | The premium remains the same throughout the policy term. |
| Age Advantage | Younger individuals have lower premiums. |
Below is an example price comparison of a term policy with a decreasing term insurance policy. These are quotes for a £100,000 policy. This covers a 30-year period and is based on a healthy non-smoker.
| Your Age | Level Term Life Insurance | Decreasing Term Life Insurance |
|---|---|---|
| 20 | £4.95 | £4.59 |
| 25 | £5.37 | £4.86 |
| 30 | £5.94 | £5.35 |
| 35 | £7.68 | £6.17 |
Why get life insurance at a young age?
Younger people just beginning their careers do not typically think about life insurance. You are in the prime of your life, so why would you need it? Unfortunately, death can strike at any time.
Rather than burdening loved ones with these financial obligations, you can spend a small amount to buy life insurance that provides a lump-sum payout to your beneficiaries.
Why it makes sense to buy at this time
At the beginning of your professional life, you may have only a small amount of savings and pension benefits.
However, you may have financially dependent parents or other relatives, or run your own businesses, further increasing your financial liabilities.
You may have married or had children at a young age, increasing the number of dependents you have. If you die at a young age, savings and pensions may not be enough to provide for these loved ones.
Rising costs make it even more difficult for beneficiaries to make ends meet.
The payout can be used to repay your debts, cover funeral expenses, pay for the care or education of minor children, or provide lifestyle support.
Some purchase life insurance in young adulthood or when they buy a home or car. Beneficiaries can use the cash value life insurance payout to repay the associated loan upon the passing away of the policyholder.
People can save money by purchasing life insurance when young, with premiums as low as £5 each month. Many find this affordable and can continue the cover throughout their lifetimes.
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What is the Best type of life insurance for a young family?
For young families in the UK, the best type of life insurance often depends on your specific needs and budget. Term life insurance is usually recommended due to its affordability and simplicity.
It provides coverage for a set period, ideal for covering specific financial responsibilities, such as a mortgage or children’s education.
Alternatively, whole life insurance, though more expensive, offers lifelong coverage and a cash value component, which can be a financial asset in the long run.
Clear benefits for young professionals
For young professionals, term life insurance is often the best choice. It’s cost-effective and provides substantial coverage for a specific period, aligning with career growth and financial obligations like loans or mortgages.
This type of insurance is ideal for those seeking financial protection without a hefty premium. As your career and personal circumstances evolve, you can reassess your insurance needs, potentially opting for more comprehensive coverage or additional policies.
Life Insurance For A Young Adult FAQs
So, which type of young adult life cover is best?
In our opinion, term life insurance is a good choice
This coverage from life insurance companies is very affordable, protects the insured against premature death, and provides a level of protection and financial stability needed for that age group.
Term life insurance is inexpensive and straightforward. It covers you for a specific period, and you can choose the length of your term. If you’re under 30, you could get lower rates by taking a longer-term policy, usually 10-20 years.
There are two primary types of term-based life insurance:
Level term life insurance
Level term life insurance is likely the most suitable policy for protecting future assets.
It can provide peace of mind when you need it most, whether that’s two years before your mortgage interest rate increases, or if you have other major expenses on the horizon, like buying a property or starting a family.
The sum assured under level-term cover remains the same throughout all stages; so even if death occurs unexpectedly (at any age), your loved ones will always receive the amount they were insured for.
Decreasing term life insurance with no pre existing medical conditions
With decreasing term cover the amount of risk decreases over time. Decreasing term cover becomes cheaper than level plans because there’s no need for an increased sum assured.
This means you could save money on your life policy premium payments.
What about whole life insurance?
Whole of life insurance is a type of insurance policy that guarantees coverage for the policyholder’s entire lifetime. It differs from term life insurance, which only covers a specific period of time.
With whole life insurance, the policyholder can pay slightly higher premiums throughout their lifetime, and the policy remains in effect as long as premiums are paid.
If the policyholder dies during the policy term, their beneficiaries will receive a payout. If they survive to the end of the policy, they will receive the total amount of premiums paid, minus any fees or withdrawals.
Some whole life insurance plans also offer a cash value that the policyholder can access during their lifetime.
This cash value accumulates over time and can be used to pay premiums, cover healthcare costs, pay student loan debt, or supplement retirement income.
Should I get life Insurance in my 20s?
It depends on a few factors, such as general health and individual circumstances. Are you ready to settle down and start a family?
Do you want to provide for your family? Do you have debts that you need to pay off? When deciding if you should get life insurance in your 20s, these are all questions you need to ask yourself.
We can help you choose cheap life insurance policies from the top life insurance brands, and we are happy to answer any questions you might have without obligation.
It is recommended that young people buy life insurance after they have enough money saved to cover funeral costs, outstanding debts, and any other obligations. It might be necessary if someone has a child or is supporting other people financially.
Life insurance is a cost-effective form of protection, and you should evaluate how much protection you need based on your current situation, your family’s needs, and your future goals.
How much is life insurance for a 20-year-old?
Life insurance for 20 year olds can represent exceptional value for money.
Monthly costs for a mortgage life insurance policy for a 20-year period are around £8 per month, level term life insurance at £4.50, and decreasing term life insurance at £4.70. If you are a smoker, expect to pay around £5.80 monthly.
What is the cost of life cover for a 30-year-old?
The monthly cost for mortgage life insurance for a 30-year-old is roughly £8.10 per month, Level term life insurance at £5.50, and decreasing term life insurance at £5.15. If you are a smoker, expect to pay around £9.83/month.
All the Quotes for the three age ranges mentioned are calculated based on individual circumstances on a level term policy worth £100,000 of coverage over a 30-year policy term.
Are life insurance policies for young adults a good investment?
Young adults and young mums have several reasons to take out life insurance, including the low premiums available in their 20s or early 30s.
If you take off life coverage until later in adulthood, premiums can increase as your birthday rolls around. Ultimately, it becomes harder to get affordable rates on policies due to the greater size of the risk to the life insurance companies associated with being older.
Contact us today at Insurance Hero or visit our registered office for more information about how we can help protect what matters most with affordable life insurance from an expert provider.
External research resources:
Steve Case is a seasoned professional in the UK financial services and insurance industry, with over twenty years of experience. At Insurance Hero, Steve is known for his ability to simplify complex insurance topics, making them accessible to a broad audience. His focus on clear, practical advice and customer service excellence has established him as a respected leader in the field.
