Guides

This content was reviewed and approved by Geoff Eaton and Fiona Robson.

What is life insurance for young adults?

Simply, it’s a life insurance policy that’s taken out when you’re younger. You’d normally take it out if you wanted to cover mortgages and debts or offer your family some stability if you suddenly pass away. You may just take it out for peace of mind.

As a young adult, it’s no different to a life insurance policy you might start when you’re 40 or 50 and works in the same way. Essentially, you arrange the total amount you want to be covered for and the length of time you want your policy to last. As life throws us so many curveballs, it’s often better to be prepared, especially if you have a young family or a large mortgage to cover.

Why should you take out life insurance as a young adult?

Life insurance is designed to pay out if you pass away, offering your family some stability and financial support. Everyone’s circumstances and priorities are different. Some might start life insurance to cover their young family, whereas others could purchase a policy that covers them for a mortgage.

You might consider a life insurance policy if you:

• Want a just-in-case backup for your family to give you peace of mind.
• Want to protect any children you have or are expecting.
• Have a spouse or partner that relies on your income, either as a sole income or as well as their own.
• Are about to purchase a property and you want a policy that works for your mortgage repayments.
• Are depended on financially, such as much younger siblings, disabled relatives, or elderly parents.
• Want insurance against a large debt or investment that either requires your loved ones to pay it back on your behalf or pay a large amount of tax.

Whatever your reason, you’ll want a life insurance policy that covers the right amount and offers you reassurance.

What does your life insurance policy cover?

As you decide the total amount of cover you want, you’ll have an idea of how your death benefit might be used. For example, you could purchase a policy to cover the remaining amount on your mortgage, or you may want to just help your partner pay the bills.

Should you get life insurance at 18?

One benefit of purchasing life insurance earlier in your life is that it could be cheaper. Typically, the younger you are the less you’ll pay on premiums, but this does depend on a few other factors, like your lifestyle, health and smoker status.

Some might consider 18 too young to take out life insurance, but as an adult, the choice really is yours. Life insurance is excellent if you’re about to start a family or are fortunate enough to consider a mortgage. Some young adults are also breadwinners for disabled parents or younger siblings by the age of 18, so you might want life insurance as a just-in-case resort.

Alternatively, you may not need it if you’re still living at home, about to enter further education or don’t have dependants who rely on you. Life insurance is about preparing your family and loved ones in the event of your unexpected death. That’s why many who earn a salary, start a family or have dependants choose it.

Should you get life insurance in your 20s?

Life insurance might not be at the top of your priority list in your 20s. Some of us use this time to develop our education, build the foundations of our careers or start a family. As an adult, you’ll start building the life you want and the freedom you need. Whatever you plan on doing, it may be suitable to protect yourself, as well as any children, with a life insurance policy. Then again, it just might not be the right time.

Of course, life insurance might be a lower priority in your 20s, especially if you don’t have a household to run, children to look after or other financial dependants, like disabled parents or siblings. You may just be finding your feet in the adult world after all.

However, a good portion over those under the age of 30 do choose life insurance, but only when it’s right for them. Some people choose it simply to support their family in case they pass away, leaving partners and children, or parents, with some money in case tragedy occurs.

By your late 20s, you might be considering a large purchase, such as a home, and it might benefit you to have a policy in place to support you. If it’s not already requested as a pre-condition by your mortgage lender, it could be a good idea to take out a policy that covers the remaining balance on your mortgage. Ultimately, if you pass away whilst repaying your mortgage, your death benefit can be used to pay your remaining balance instead of being passed down to loved ones.

Is life insurance worth it if you’re under 30?

Life insurance can be worth it between the ages of 18 and 29 if it feels right for you, and you feel you have a need for it. The main reason you might take out a policy is to offer yourself peace of mind in case you pass away. Any death benefit amount can be paid to friends, family and children, helping the people that matter to you the most. Just as some adults start a family later in life, you may have chosen to have children earlier on. You might also be fortunate enough to have bought your own home and taken out a mortgage. These reasons, alongside a few others, are prime examples of how life insurance can support you.

It’s true that life insurance won’t work for everyone, particularly if you’re just getting on your feet with your finances. Alongside rent payments, saving up for home deposits, and paying for transport and food, you may be a little strapped for cash when you first start out. Without dependants who rely on you or your income, you may not need to worry about life insurance just yet.

What is the minimum age for life insurance?

The minimum age for which you can purchase a life insurance policy for most providers is 18 years old, however, at LV=, we start offering policies to those aged 17 years and older.

Whilst you may not legally be considered an adult, you might have to make some very adult decisions earlier on in life. For example, if your parents, guardians, or siblings depend on you financially, you may want the security a life insurance policy offers.

If you're over 17, life insurance might be right for you. Life insurance can help you cover:

• The mortgage on your property.
• Your spouse or civil partner.
• Other family or loved ones who rely on you financially.
• A family that relies on your income.

Do you need life insurance if you’re young and healthy?

Life insurance isn’t just for those later in life or with health problems, it’s a smart choice for young and healthy individuals too. Although we all want to live long and healthy lives, life can throw curveballs at us. Unexpected deaths can happen to anyone at any time. So, it’s worth looking at who relies on you for financial support. In fact, it’s also good to consider who might inherit any debts or repayment plans you have.

Can you purchase critical illness cover without a medical condition?

Yes, you don’t need to be ill to qualify for critical illness cover, you don’t even need any pre-existing medical conditions. In fact the better your medical history and the healthier you are, the more likely it is you’ll pay less for your insurance, compared to someone with a poor medical history. In some cases if you have a really poor medial history you may find you are unable to get cover, so it’s definitely better to consider it when you’re still healthy and active.

What affects life insurance premiums for young adults?

Certain lifestyle choices affect your insurance premiums, causing them to be higher. If you’re looking into life insurance, you’ll need to share:

• Your details, including name, age and address.
• Your lifestyle choices, such as whether you smoke or drink.
• Any health or medical conditions you have.
• The type of job you do.
• The type of cover you want, including your total amount of death benefit.
• Any additional cover, including critical illness for yourself or your child.

It’s important to be honest when you apply for life insurance as it can affect your loved one’s ability to claim. If you aren’t honest your loved ones may find that the insurer is unable to pay the claim, at the time when your loved ones need it the most.

When are you too old for life insurance?  

Many life insurance policies will let you take out a policy until around 80-90 years old – however this is dependent on the provider and there is no standard upper age limit.  

What’s the best life insurance for young adults?

The type of life insurance policy you want depends on what you want to use it for and how much cover you desire. These life insurance policies offer young adults’ peace of mind and protection for their loved ones.

Decreasing term life insurance

Decreasing life insurance is designed specifically to cover the amount owned on a capital and interest repayment mortgage. You’ll purchase your life insurance policy for the same term as your mortgage, for example, a 25-year mortgage and a 25-year life insurance policy. You’ll select the total cover amount you want and will pay fixed premiums until your policy expires. When the cover starts you should normally choose an amount that covers the initial amount you have borrowed. Then as you repay your mortgage and the amount you owe goes down, the amount of cover on your decreasing life insurance also goes down.

At the end of your policy, your mortgage should either be completely repaid or almost fully repaid. If you were to sadly pass away before your term ended, the amount of cover at the time would be used to repay all or some of your mortgage, leaving your loved ones with little to no inherited debt.

Level term life insurance

Level term life insurance allows you to select the total amount you want based on the term you need. Your cover could last from five to 50 years, allowing you to plan for your family’s future. You’ll pay a fixed premium each month to your insurance provider. And, as long as you continue to pay premiums on time and in full, you’ll stay covered. The amount of cover provided by the policy also remains fixed, so whether you die after 2 years or 20 years, the amount paid out won’t change.

If you pass away during your policy term, your death benefit will be handed to your beneficiary, whether that’s your parents, siblings, children, friends or a partner. If you’re fortunate enough to outlive your policy, you may be free to purchase a new one, or you may feel you no longer need one.

Increasing term life insurance

Increasing term life insurance is designed to increase over time (either by a fixed amount or linked to the rise in inflation). This means your pay-out shouldn’t be at much of a risk of being affected negatively by inflation. Simply put, if you take out a policy for 50 years and pass away in the 49^th year of your policy, your total death benefit could closely match the cost of living 49 years after you take out your policy.

Of course, the downside to this is that the cost of your policy will usually increase as well, depending on the provider.

Please note, LV= does not currently offer increasing life insurance policies directly through LV.com. If this is something you’re interested in then you’ll need to speak to a financial adviser.

Whole of life insurance

The main difference between whole of life and the above three term life insurance types is that there’s no fixed end date. Unlike term life, a whole of life insurance policy only expires when you pass away. For whatever reason, you might want a life insurance policy that guarantees a payout, as long as you keep up with your monthly premiums.

Whole of life is more expensive to purchase. As there’s a chance you’ll live longer, it can be expensive to manage and mean higher monthly premiums compared to a fixed term policy. Even if you take this type of policy out in your 20s, you may find you’re paying more for it over time.

Please note, LV= no longer offers whole of life insurance policies.

Critical illness cover

Despite being young, you may want to add critical illness cover to your existing policy. If you have children, you can also ensure they’re covered if they are diagnosed with a serious or life changing illness too. Although critical illness cover is often added on a just-in-case solution, it’s a smart choice to do so. Most of us have been affected by or known someone who has been critically ill and, sadly, it’s more common than we like to believe.

How do you get cheap life insurance?  

As we referenced earlier in this guide, the younger you are when you take out life insurance, generally the lower your premiums will be (though it will be lifestyle, health, and smoker status-dependent).  

One thing to bear in mind however – you should really consider what the right life insurance policy is for you and not necessarily go for the cheapest option. It may be that the cheapest option is the right option for you, but if you are unsure and want to ensure your loved ones are protected as best as possible, you should speak to an impartial adviser.  

If you are also interested in critical illness cover, sometimes combining life insurance and critical illness policies together can work out cheaper in the long run. 

Lastly, it’s important to shop around or make use of an adviser to help you find the best deal and policy for you.  

Looking for a life insurance policy that protects your family?

At LV=, we’re proud to have supported thousands of families and individuals over the years who have had to deal with tragedy. If you’re looking for life insurance that offers you peace of mind, why not get a quote from us today?

If, however, you’re unsure and need further advice, we’ve partnered with LifeSearch. They offer independent professional advice based on your individual needs.