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The Best Life Insurance for Young Adults in 2024; See More Details

The Best Life Insurance for Young Adults in 2024 – Life insurance is an important financial tool that often gets overlooked. If you’re a young adult, you might assume that you don’t need life insurance.

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However, securing a life insurance policy during your younger years can be a smart move and provide peace of mind that your loved ones are financially protected if the unimaginable happens.

To find the best life insurance for young adults, we evaluated companies based on their term life insurance products.

Best Life Insurance Companies for Young Adults

  • Symetra
  • Corebridge Financial
  • Lincoln Financial
  • Pacific Life
  • Principal
  • Protective
  • Ameritas

What Type of Life Insurance Is Best for Young Adults?

Term life insurance is often the best for young adults because it’s the most affordable type of life insurance, although no one type of life insurance fits everyone’s needs regardless of age.

Many factors go into determining the right type of policy. For example, the insurance needs of a person with a young family and a mortgage will look different from someone single, rents, and has an elderly relative who relies on them financially.

When comparing options among the best life insurance companies, your choice will come down to two main types of life insurance: term life and permanent life. Both options can offer valuable benefits but in different ways.

Term Life Insurance for Young Adults

Term life insurance allows you to lock in rates for a specified term. Typically, that’s 10, 15, 20, or 30 years. Young adults might also consider the 40-year term life insurance policies offered by Legal & General America (from its subsidiary Banner Life) and Protective.

If you die while the coverage is in force, the insurance company pays the death benefit to your beneficiaries. If you outlive the policy, it expires (if not renewed) and no benefits are paid. The cost of term life insurance is much lower than permanent life.

If you want to continue your coverage at the end of the term, you can typically renew the policy up to a certain age. But it’s generally not a great option because you should expect to pay significantly higher rates at each renewal.

Term life insurance can be a great choice for young adults who are budget-conscious and want to ensure they have protection in place when financial obligations are often at their highest.

Permanent Life Insurance for Young Adults

Permanent life insurance can provide coverage for your entire lifetime, as long as premiums are paid. Like term insurance, a permanent life insurance policy pays out a death benefit to your beneficiaries when you die. Permanent life insurance also generally includes a cash value component that grows over time.

A portion of the premiums you pay goes toward this cash value account, which you can borrow against, take a withdrawal, or use to pay premiums.

There are multiple types of permanent life insurance.

  • Whole life insurance has fixed and guaranteed premiums, rate of return on cash value, and death benefit.
  • Universal life insurance offers the flexibility to adjust your premium payments (within certain parameters). There are three main types of universal life insurance: guaranteed universal, indexed universal, and variable universal.
  • Burial and final expense insurance is a small whole life insurance policy with a death benefit that’s usually between $5,000 and $25,000 and is designed to help cover funeral costs and final expenses.
  • Survivorship life insurance is usually whole life insurance that insures two people but only pays out the death benefit when both have died.

Permanent life insurance costs more than term life insurance. Still, it’s an option for young adults who want a cash value life insurance policy or who have dependents who will rely on them indefinitely for financial support.

Is Life Insurance Worth It for Young Adults?

Life insurance is generally worth it for anyone who has people relying on them financially.

Plus, young adults are typically healthier, which means it’s easier to buy life insurance at a low rate compared to when you’re older or potentially facing health issues. Life insurance quotes will go up every year that you wait to buy.

Of course not all young adults need life insurance. A single person with no dependents and no debt that will be passed on likely does not need a policy. Life insurance is primarily about providing for others after your death.

When a Young Adult Should Consider Getting Life Insurance

If you’re a young adult, here are common situations when you might consider making life insurance a part of your overall financial plan.

You Have Dependents

Having life insurance in place is especially important if you have dependents, such as children, a spouse, or others who depend on you financially, particularly if you’re the primary earner in the household.

The last thing you want is for your loved ones to be financially burdened if you pass away. The life insurance death benefit can be used for any reason, including paying bills, covering educational expenses, and paying for final expenses such as funeral and burial costs.

You Have Large Debts

If you pass away, not all debts die with you. A life insurance policy can provide the funds necessary to pay off these debts, ensuring your loved ones aren’t left with the financial burden.

You’re in Good Health

The biggest determining factors in life insurance costs are age and health. So even if you don’t have dependents now, securing life insurance while you’re young and healthy can be a good tactic. That way, if you decide to grow your family in the future, you’ll have a policy locked in at an affordable rate.

You’re a Business Owner

Life insurance isn’t just for financially protecting family members. If you own a business or are a key partner, life insurance can help ensure the business continues to run smoothly if you die unexpectedly. Funds can be used to cover debts, operational costs, and payroll, and generally maintain business continuity.

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