Should You Buy Life Insurance In Your 20s?

Written by Jeff Root

Life insurance will never be cheaper than it is in your 20s. But many people in their 20s don’t need life insurance. If nobody depends on you financially, or you do not have large amounts of debt, then it may not be the best use of your money.

However, if you do have financial dependents or college loan debt, life insurance is a way to protect them financially, which you will hopefully never have to use.

What You Should Know About Life Insurance at Age 20

It doesn’t get cheaper than this. Buying life insurance is like planting trees, yesterday was better. Today is the next best day.

Life insurance is a gift to people you care about who financially depend on you. If you aren’t married and don’t have children, make sure there is a financial reason to buy life insurance. Otherwise, it can take away from something like retirement contributions which are also super important in your 20s.

A spouse or children is an excellent reason to buy life insurance. From there, you can choose the type of life insurance that best fits your family situation.

What you pay for life insurance will be based on a handful of factors. The three big ones are your age, your biological sex, and your health. You can’t do much about the first two. At least with your age, if you need life insurance, you can save yourself some money by not procrastinating on it. Health is tricky.

Each company rates health differently. Company Y will have different cut off limits for height/weight ratios than Company Z. The same thing happens with pre-existing medical conditions. So the trick becomes finding the company with the best underwriting guidelines for you.

Pros to Getting Life Insurance When You’re Young

It’s cheaper. That’s the big one, but it covers several reasons in addition to age.

Locking in Lower Rates

First, by purchasing life insurance as young as possible when you need it, you lock in the lowest rates. The younger you are the lower your life insurance rates. It’s easy as that.

The more time between your current age and the average life expectancy, the lower your chances of dying of natural causes. Even if you’re getting permanent life insurance, the insurance company has more time to try and invest that money to make up for what they will pay your beneficiary upon your passing.

Fewer Health Issues

Everybody knows that as you age, health problems tend to start cropping up. Things that are unlikely in your 20s become standard in your 50s. Not only do health issue begin to pop up, but weight tends to start creeping on as well without a conscious effort to exercise and eat right.

Your health and your BMI are two of the fastest ways to increase your rates. Many times there is nothing you can do about health issues. Even weight gain can be difficult to control if there are associated health issues or genetic predisposition. But life insurance companies don’t care about that. They are only interested in your expected lifespan.

By getting insurance before health issues start appearing, you can lock in rates at a better health class.

Cheaper to Convert or Renew Your Policy Later

If you buy a 30-year term life insurance policy in your 20s, you may still have reason to keep a life insurance policy when it expires in your 50s. The difference in premium prices between 24 and 29 is not huge compared to the difference in premiums between 54 and 59.

This is doubly true if you decide in your 40s or 50s that you need a permanent life insurance policies which can easily be 10x the cost of a term policy at the same age.

Best Type of Life Insurance Policy for 20-Year-Olds

This will depend on your income and your family situation. If you can afford a permanent policy and have good reason to expect that you will need one in 50 years, it’d be cheapest to buy it now. But if you are still building up your career, have a young family, and disposable income is a laughable thought, a term policy might be better for you.

Term Life Insurance

Term life insurance lasts for a set number of years, known as a term. So when you look at a policy that says “30-year term” that means the policy will expire 30 years after the start date.

Term life insurance is best for situations that will also have an end date. Mortgages end. Children become self-sufficient. Spouses retire. Those types of things. Most people in their 20s are buying life insurance to cover minor children to adulthood, either 18 or college completion.

It’s the least expensive type of traditional life insurance policy. There are no extra components that cost extra money. Term is simple.

You can add extra provisions, called riders. Waiver of premium means you won’t have to pay your premiums if you’re disabled. Return of premium means that if you outlive your term policy, the insurance company returns most or all of your premiums. Child rider will cover a child if anything happens to him or her.

Permanent Life Insurance

Permanent life insurance lasts your lifetime. Although you will see many policies with maturity dates of 105, 115, or 121. But since most people can’t reach those ages yet, permanent life insurance is still an apt name.

In addition to the death benefit on the policy, permanent life insurance has a cash value accumulation portion. It’s an additional component which accumulates as you pay your premiums, then grows slowly on its own. You can borrow against the cash value accumulation of your policy with extremely low interest.

The cash value components of different types of permanent life insurance policies have slight variations. Whole life has a more stable growth rate than an indexed universal life policy. You can make all sorts of customizations depending on your needs.

Permanent life insurance is best for people with more discretionary income who expect to have a moderate estate when they pass on.

Is Term or Permanent Life Insurance Better?

That depends on your situation, your income, and your reasons for buying. It would be silly to buy a permanent life insurance policy to cover your mortgage. But it would be just as foolish to buy a term policy to cover estate planning.

So re-examine your reasons for buying life insurance. Are they reasons that have end dates? Like your children becoming self-sufficient. Or will you always need to cover them? Like a spouse whose disability prevents them from working.

Your reasons for looking into life insurance will tell you which policy will be best for your family.

Tips on Getting the Best Life Insurance for 20-Year-Olds

There are several ways to save money on life insurance other than just by being in your 20s. Choose a company who also has the most favorable underwriting guidelines for your health, your history, and your build.

1. Know How Much Life Insurance You Need

Don’t overbuy with the expectation that things will change. For example, if you have two children and are planning on having three, don’t buy life insurance to cover three children until you have three children. You never know what could happen between now and then that might prevent that third child. You can always get another policy later.

Calculate exactly what you need to cover your reasons for buying life insurance. Don’t ballpark the number based on your income. Ballparking leads to either overspending and wasting money, or leaving your family underinsured.

If you want to cover a mortgage, calculate it. If you are covering children, look at your projected cost to raise each child and get that number in life insurance. You can do this for every reason to purchase life insurance.

Buying the right amount will make sure you don’t spend a dollar more than necessary. Plus, your family won’t be left scrambling with a smaller death benefit than they really needed.

2. Work with an Independent Life Insurance Agent

Independent life insurance agents work for their clients first and foremost. You won’t see the name of a huge insurance company over their office door. The advantage this type of agent brings you is they can work with many companies, letting them sift through all the options down to the best ones.

With hundreds of life insurance companies in the United States, it would be exhausting to go through each and every one of their underwriting policies. An independent agent has already done all that work for you.

The other type of agents (captive agents) work for one insurance company. They can’t sell you any other policy, even if they have a variety offered by the one they work for. While companies price all their policies differently, they don’t change their underwriting guidelines. Those are what determine your health class, which in turn determines your rates.

Term Life Insurance Rates

The following are sample rates for men and women looking for term life insurance in their 20s. We chose the two most popular term lengths for people in their 20s, 20-year, and 30-year terms.

This table shows potential monthly rates for men in good (preferred) health. To see what your rates might look like, take advantage of our free instant quote tool.

$100,000 20-Year $100,000 30-Year $250,000 20-Year $250,000 30-Year $500,000 20-Year $500,000 30-Year
Age 20 $11 $13 $17 $24 $26 $40
Age 24 $11 $13 $17 $24 $26 $40
Age 29 $11 $14 $17 $25 $27 $42

The next table is for women who don’t smoke in good health.

$100,000 20-Year $100,000 30-Year $250,000 20-Year $250,000 30-Year $500,000 20-Year $500,000 30-Year
Age 20 $9 $12 $14 $19 $20 $29
Age 24 $9 $12 $14 $19 $20 $29
Age 29 $10 $12 $14 $21 $22 $34

You will notice that especially between years in your early 20s, the difference in rates is mere cents.

Whole Life Insurance Rates

Whole life insurance is the least complicated type of permanent life insurance. It has a basic cash value accumulation feature and lasts until age 121.

The sample rates below reflect several ages to give you an idea of what you might pay throughout your 20s. For your specific rates, you can use the instant quotes tool.

These rates reflect men in good (preferred) health who don’t smoke.

$100,000 $250,000 $500,000
Age 20 $70 $165 $320
Age 24 $79 $188 $366
Age 29 $95 $228 $445

The next chart shows potential monthly rates for women in good health who don’t smoke.

$100,000 $250,000 $500,000
Age 20 $62 $144 $279
Age 24 $70 $165 $320
Age 29 $84 $199 $387

Best Life Insurance Companies

These are the top 5 insurance companies for people in their 20s.

Remember, the best company for your may vary depending on your medical history and the company’s underwriting guidelines.

We picked these 5 based on their general underwriting guidelines working well for most people.

Also, we took into account their claims history, financial strength, and affordability.

Company A.M.Best Customer Reviews
Foresters A+ 4.1 / 5
Protective A+ 4.3 / 5
Transamerica A+ 4.2 / 5
AIG A 4.1 / 5
SBLI A- 4.0 / 5


Foresters holds an A from A.M. Best for their financial stability. They offer some of the lowest whole life rates you can find. Their term policies are also extremely competitive.


Protective shines in the lower benefit levels across all term lengths. They take remarkably good care of their customers and have an A+ from A.M. Best.


Transamerica offers remarkably low rates for women compared to its peers. They also earned an A+ from A.M. Best for superior financial strength.


If you are looking for high benefit amounts, AIG has you covered for an affordable rate. A.M. Best gives them an A for excellent financial strength.


One of the great things SBLI does is that they offer no-exam policies for almost the same price as many companies provide fully underwritten policies. If you want a policy that will allow you to skip the medical exam, consider them. They also have an A- from A.M. Best.

Finding Life Insurance at Age 20

If you want to pay as little for life insurance as possible, buy it in your 20s. You can see from the sample rates above, there is a few dollars difference in prices at most in your early 20s.

To save as much money as possible, keep in mind your reasons for buying life insurance and exactly how much you need. That way you won’t be tempted to buy too much or cut corners and buy too little.

At 20 years old, you probably are new to the world of life insurance and have a lot of questions.  That is just fine.  Our agents are available to help you fully understand life insurance and how it can help your family.  Give us a call today to learn more about how to financially protect your young family.

Or, get started using our online quoting engine in order to find the best life insurance quotes for 20-year-olds instantly.

Compare the Best Life Insurance Rates for 20-Year-Olds

Great rates from the Best Life Insurance Companies.

About Best Life Insurance Companies
About Best Life Insurance Companies

We work with individuals across the nation to secure the best life insurance rates.

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