Does It Pay to Get Life Insurance in Your 20s?

Consider your unique circumstances before deciding if you need a policy.

There are a number of myths about life insurance that keep people from getting it. One such myth is that it's too expensive for the average worker. But many people who buy a term life insurance policy instead of a whole life policy find their premiums are more affordable.

Another big myth associated with life insurance is that people shouldn't buy it when they're young. But it's often a good idea for people not to wait to get a policy. Many consumers can secure a more affordable premium if they apply for life insurance earlier in life. What's more, there could be plenty of good reasons for people to buy insurance during their 20s.

It's more about needs than age

Some people in their 20s have no dependents and no one who stands to get hurt financially if they were to pass away. For many of those people, there's often little reason to pay for insurance at that stage of life. On the other hand, if someone gets married in their 20s and shares expenses with a spouse, it could pay to get life insurance right away.

Let's imagine a couple buys a home together, but they need both of their incomes to keep up with the mortgage. If one person were to pass away, their spouse might be forced to give up the home and move. But if there was a life insurance policy in place, it could provide the surviving spouse with the income they need to stay in their home and maintain it.

Now, let's imagine a different scenario -- someone in their 20s has two children who depend on them financially. In that case, getting life insurance is likely a good idea -- especially if they're a single parent who supports their children without help.

For some people, it could even pay to get life insurance in their 20s if they're not married or don't have kids. Let's imagine a 25-year-old who helps care for a grandparent who would otherwise need to move to an assisted living facility. Genworth reports that the median annual cost of an assisted living facility in 2021 was $54,000. So for a younger person caring for a family member, it could pay to buy a policy with a high enough benefit to cover a few years of care.

Don't let age be a factor

When you're in your 20s, life insurance may be the last thing on your mind. At that stage of life, you may be more focused on paying down debt, building a career, and socking money away in the hopes of buying a home.

But for those people who have loved ones depending on them financially, it's a good idea not to overlook life insurance. The reality is that there's no such thing as being too young for life insurance. And those who apply for coverage in their 20s might secure a policy that's more affordable and easier to work into a budget.