Life Insurance for Young Adults
Life insurance for young adults has monthly rates between $15 to $100 per month. Most young adult life insurance policies are in Super Preferred, Preferred, and Standard classifications. Life insurance policyholders in their 20s and 30s statistically have better health and have a higher life expectancy. Compare multiple companies and shop around to find the best life insurance rates for young adults.
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UPDATED: Mar 31, 2021
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- Affordable life insurance for young adults is much cheaper than middle-age and senior policyholders.
- The “Return of Premium” rider can be a short-term investment for young adults.
- Female life insurance rates are much cheaper than male life insurance.
Life insurance for young adults is cheaper than any age group in the life insurance industry. Young adults have higher chances of life expectancy and extended periods to correct health.
You can find the most affordable rates from the best life insurance companies using our guide. We’ll also explain how different life insurance coverages work, which companies are the best, and why young adults have cheaper rates.
If you want life insurance for young adults right now, enter your ZIP code in the FREE comparison tool above.
What is Life Insurance for Young Adults?
Getting life insurance while you still have your youth is a proactive measure that ensures that your loved ones are taken care of if you were to pass away.
However, most young adults can outlive their term life insurance policies. Young adults who invest in whole life insurance policies will have life insurance their entire life.
There are several life insurance coverage options available to young adult consumers. We’ll spend the next few subsections exploring some key life insurance policies for young adults.
What is Burial Insurance for Young Adults?
Most young adults are not concerned about burial insurance (also called Final Expense Burial Insurance or Funeral Insurance). If you’re a single parent or work a high-risk job, burial insurance is something you might want to consider.
Burial insurance can cap at $50,000. Today, funeral costs are around $9,000. Funeral costs could increase, and burial insurance coverage limits may expand in the next few years. As a younger policyholder, you can save thousands more per year when you get burial insurance.
Who Are the Best Term Life Insurance Companies for Young Adults?
Term life insurance is one of two common life insurance types in the United States. Basically, term life insurance is life insurance that lasts for a specific amount of time. Common term life insurance periods are 10-year and 20-year term life plans.
You can get term life insurance policies from any life insurance company out there. Here’s a list of the best life insurance companies and their average monthly rates.
|Companies||Average Monthly Life Insurance Rates||A.M. Best Rating|
|New York Life||$11||A++|
|Mutual of Omaha||$12||A+|
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They’re cheaper than whole life policies, but they don’t carry investment or savings possibilities like whole life or universal life insurance policies.
What is Universal Life Insurance for Young Adults?
If you want a life insurance policy that’s close to an investment, get whole life insurance like universal life insurance.
Under universal life insurance, a portion of your life insurance rates will go toward your policy, and the other part goes into a savings account that’s monitored by your life insurance provider.
You can hold onto universal life insurance as long as you want. It’s a whole life insurance policy, so it sticks with you until you cancel your policy or pass away.
What is Variable Universal Life (VUL) Insurance?
Universal life insurance won’t allow you to make investments, but variable universal life insurance (VUL) gives you the right to use the money you put into life insurance savings as an investment.
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How much does life insurance for young adults cost?
Your life insurance is determined by age, gender, health, and the life insurance provider. You can guess why life insurance cost is based on age and gender, but why is health a contributing factor.
Most life insurance companies can measure your health by asking for a medical examination. These medical screenings will determine the class of your life insurance policy.
Life insurance is in five classes, which are Super Preferred (Preferred Plus), Preferred, Standard Plus, Standard, and Substandard.
Most young adults are between Super Preferred, Preferred, and Standard Plus. Therefore, they may not pay as much for life insurance per month. Let’s look at the average cost of life insurance for a 20-year term life policy.
|Age and Gender||$250,000 Policy Average Monthly Life Insurance Rates||$500,000 Policy Average Monthly Life Insurance Rates||$750,000 Policy Average Monthly Life Insurance Rates||$1 Million Policy Average Monthly Life Insurance Rates||$2 Million Policy Average Monthly Life Insurance Rates|
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We included male and female rates to compare the cost for gender and to compare the cost of coverage values.
According to the Internal Revenue Service, any claim payouts you receive is taxable income.
The higher the coverage value, the more a policyholder pays per month regardless of gender. However, males generally pay more life insurance than females.
When should young adults get life insurance?
The earlier you start investing in life insurance, the better. An ideal age to get life insurance is between 25-35—life insurance appears to be cheaper within these ten years.
Take advantage of cheap life insurance costs to avoid anxieties for yourself and your loved ones.
Buying life insurance builds wealth and sets up a financial pillow for loved ones, like single moms and parents with disabled children.
3 Reasons Why Young Adults Should Get Life Insurance
Let’s break down the reasons why purchasing life insurance as a young adult is beneficial to you and those closest to you.
#1 – A Way to Build Wealth
Whole life insurance policies provide a way to build wealth while you’re still living. Universal life and variable universal life insurance policies will give you options to save money or invest.
If you get a “Return of Premium” rider, everything you paid into the term life insurance policy will be paid back to you in full.
#2 – Financial Reassurance for Loved Ones
High-risk and high-stress jobs increase your chances of death or disability. Build a financial pocket for those who could be left behind if you pass away. Life insurance can handle funeral costs, debts, and other expenses that may cause problems for those you love most.
#3 – Sets A Path to Deal with Debt
How does life insurance clear debt? There are tons of life insurance perks out there that will deal with debt. When the insured has passed away, debt collectors will turn their targets to the children, legal guardians, etc.
Life insurance claims have a chance to clear that debt if the coverage value is high enough.
Life Insurance for Young Adults: The Bottom Line
Ultimately, it won’t hurt to invest in life insurance. It’s an investment that will cost you up to $100 per month. Under the right circumstances, you turn life insurance policies into short-term and long-term investments.
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