For many young adults, financial planning can feel like something to think about later. With college, university, travelling, and taking the first steps on the career ladder competing for attention, life insurance is rarely a priority.
However, while life insurance is not often associated with younger people, there are circumstances where taking out cover earlier in life can make sense. L&G’s guide helps young people assess their need for life insurance and whether it’s right for them.
When should young people get life insurance?
You can get life insurance from the age of 18, but whether you should depend on your circumstances rather than your age. Life insurance is worth considering if other people, such as a partner, children or other family members rely on you for everyday expenses, like bills or childcare costs. For that reason, life insurance for 30-year-olds and over is more common, but every person’s situation is different, and many younger adults get life insurance if they have dependents.
Is life insurance in your 20s worth it?
If someone depends on you financially, then even in your 20s, life insurance may be something you want to consider.
L&G life insurance premiums stay the same throughout the length of your policy (unless you make changes). This means it may be wise to get life insurance when you’re younger, rather than risk delaying the decision, as any future illnesses will make your premiums more expensive, or could restrict your ability to get cover at all.
Young adults should ask the following before looking into life insurance:
- Do you have a mortgage on a property?
- Are you married or in a civil partnership?
- Do any other family members require your financial support?
- Do you have children?
- Do you have a partner who depends on your income?
- Does your partner already have life insurance and you want a joint policy?
How does the cost of life insurance change with age?
With everything being equal, life insurance is cheaper for young people than older people. For example, a monthly premium for a 20-year-old, non-smoker, with £150,000 cover, on a term length of 25 years is quoted a £5.89 premium, whereas the same for a 40 year old is £17.80.
Best life insurance policy for young adults?
Life Insurance – This could pay out a cash sum if you die or are diagnosed with a terminal illness (life expectancy less than 12 months), during the length of your policy term. The amount of cover stays the same for the duration of the policy.
Decreasing Life Insurance – This type of life insurance helps to protect a repayment mortgage. The amount of cover reduces roughly in line with the way a repayment mortgage decreases, meaning it can be a cheaper form of life insurance for young homeowners.
Critical Illness Cover – This can be added to your Life Insurance or Decreasing Life Insurance policy for an extra cost when you take out the cover, and means you’ll have extra financial protection; it could pay out a cash sum if you’re diagnosed with, or undergo a medical procedure for, one of the specified critical illnesses that we cover during the length of your policy and you survive 14 days from diagnosis.
If you’ve decided you’d like to get a life insurance policy while you’re a young adult, you may want to use L&G’s life insurance calculator to help you decide how much life insurance you need.
To find out more about life insurance for young adults, please visit L&G’s website: https://www.legalandgeneral.com/insurance/life-insurance/guides/life-insurance-for-young-adults/
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