Less Than 1 in 3 Americans Aged 18 to 34 Have Life Insurance. Should You Be Insured at Such a Young Age?

When you're on the younger side and are trying to set financial priorities, buying life insurance may not immediately top your list. At that stage of life, you may be doing your best to build an emergency fund, pay off college, and get rid of lingering credit card debt.

Recent data from Edward Jones reveals that only 27% of Americans ages 18 to 34 have life insurance. And that's not totally surprising.

But it begs the question: Do you need life insurance if you fall into that age range? And the answer is, it depends.

Do you have people in your life who depend on you financially?

If you're not sure whether to get life insurance, there's really only one question you need to ask yourself: Are there people in my life who depend on me financially, or who might struggle financially in my absence?

If the answer is yes, then it really doesn't matter how old you are. In that case, there's a reason to buy life insurance. It's that simple.

Perhaps you're 45 years old, single, and child free. You may also not have any family members you're supporting financially or providing care or assistance to. In that case, you can probably save yourself the money life insurance would cost.

On the other hand, you could be 25 years old with a spouse and a child. In that situation, life insurance makes sense despite your young age.

What's more, it pays to consider life insurance even if you don't work but care for people in your life. Let's say you're a stay-at-home parent to two young children. You might assume you don't need life insurance because you don't have earned income to replace. But if something were to happen to you, it would take money to pay for your kids' care so their surviving parent or designated caregiver could work. So even in that situation, you can make the case for life insurance.

Applying at a young age could result in savings

Generally speaking, younger Americans may be less likely to have dependents than those who are older. So that could explain why such a small percentage of Americans aged 18 to 34 have life insurance. But if your family could benefit from a policy, then it pays to shop around with different life insurance companies and see what rates you're quoted.

One benefit of buying life insurance when you're young is that you may be in a position to snag a more competitive premium rate. This isn't a given, because it's possible to have a health condition at age 22 that reads as a higher risk in the eyes of an insurer. But generally speaking, the younger you are when you apply for life insurance, the less you might pay for it.

When choosing a policy, you have options. Term life insurance protects you for a limited period but is commonly far less expensive than whole life insurance, which protects you on a permanent basis. With term life insurance, you can choose whether you want 10 years of coverage, 20 years of coverage, or more.

Similarly, you'll need to land on the right amount of coverage. A good rule of thumb is to take your salary, multiply it by 10, and then add any joint debts you might have with a would-be beneficiary of your policy. If you're married, earn $75,000 a year, and have an outstanding $250,000 mortgage loan jointly with a spouse, then a $1 million policy could make sense.

Take some time to think about the type of life insurance that's best for you and how much coverage to buy. But don't assume you don't need that coverage just because you're young.