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Life Insurance in your 20s

life insurance 20 year old

Many of our younger clients in their twenties are happy to find out that we at IBUSA work with many of the best no exam life insurance companies, which can provide you with no hassle coverage without having to have an examiner come to your home or business.

So, if you already know how much coverage you need, it is as easy as requesting a quote and moving forward with the process. But just be aware that there is one problem that exists for most people buying life insurance in their 20s.

You see, the biggest problem that most people in their 20s will have when buying a life insurance policy is that because term life insurance is so cheap and easy to qualify for coverage, most applicants won’t speed a ton of time researching all of their options before they go apply for coverage.

Instead…

They’ll decide on an amount of coverage that they think will meet their needs, call or search online for a quote and then go ahead and apply.

Which isn’t all that bad if you’ve already figured out that you may need life insurance in your 20s you’re already way ahead of most, so it’s not like we can give you too much grief.

The only problem is…

That taking this approach to purchasing a life insurance policy will often fail to take advantage of some of the unique benefits that some of the different types of life insurance policies will offer.

Which is a mistake that can be quite costly should you decide later on in life that you would like to utilize some of these benefits.

You see…

As someone in their twenties who is already seriously considering the need to purchase life insurance, you are way ahead of the curve than most, which can potentially translate into significant savings and wealth growth over time.

For this reason…

We wanted to take a moment and discuss some of the most important factors someone in their 20s should be considering when purchasing a life insurance policy and discuss some additional benefits that you can utilize with a life insurance policy before you die!

Questions that will be addressed in this article will include:

  • What can someone in their twenties expect to pay for life insurance?
  • How much insurance should someone in their 20s buy?
  • What kind of life insurance should someone in their twenties buy?
  • What are “living benefits,” and how can they help me?
  • How can I improve my chances of buying the best life insurance policy for me?

Let’s dive right in!

Life Insurance Rates for Twenty Year Olds

MaleFemale
Life Insurance In Your 20s
The following 20-29 year old sample quotes are based on a male qualifying at the top rate class.
10 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
21$9.77$14.02$18.32$19.57
22$9.77$14.02$18.32$19.57
23$9.77$14.02$18.32$19.57
24$9.77$14.02$18.32$19.57
25$9.77$14.02$18.32$19.57
26$9.77$14.02$18.32$19.57
27$9.77$14.02$18.32$19.57
28$9.77$14.02$18.32$19.57
29$9.77$14.02$18.32$19.57
15 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
21$10.19$14.76$18.97$22.66
22$10.19$14.76$18.97$22.66
23$10.19$14.76$18.97$22.66
24$10.19$14.76$18.97$22.66
25$10.19$14.76$18.97$22.66
26$10.19$14.76$18.97$22.66
27$10.19$14.76$18.97$22.66
28$10.35$14.76$18.97$22.66
29$10.35$14.76$18.97$22.66
20 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
21$12.51$18.97$25.88$30.96
22$12.51$18.97$25.88$30.96
23$12.51$18.97$25.88$30.96
24$12.51$18.97$25.88$30.96
25$12.51$18.97$25.88$30.96
26$12.53$18.97$25.88$30.96
27$12.53$19.00$25.92$30.96
28$12.58$19.09$26.06$31.45
29$12.68$19.28$26.10$31.46
25 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
21$15.91$24.56$34.26$42.45
22$15.91$24.56$34.26$42.45
23$15.91$24.56$34.26$42.45
24$15.91$24.56$34.26$42.45
25$15.91$24.56$34.26$42.45
26$15.91$24.56$34.26$42.45
27$15.97$24.72$34.49$42.68
28$16.09$25.02$34.95$43.15
29$16.27$25.51$35.69$43.91
30 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
21$18.04$28.87$40.97$49.25
22$18.04$28.87$40.97$49.25
23$18.04$28.87$40.97$49.25
24$18.04$28.87$40.97$49.25
25$18.04$28.87$40.97$49.26
26$18.08$28.99$41.15$49.56
27$18.20$29.32$41.64$50.40
28$18.38$30.10$42.57$51.72
29$18.66$30.59$43.30$53.66
All sample quotes are based on a monthly premium as of 03/01/2020 from an A- Rated Carrier and higher. Sample quotes are for a preferred plus male. Rates are for informational purposes only and must be qualified for.
Life Insurance In Your 20s
The following 20-29 year old sample quotes are based on a female qualifying at the top rate class.
10 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
20$8.53$11.22$14.32$16.66
21$8.53$11.22$14.32$16.66
22$8.53$11.22$14.32$16.66
23$8.53$11.22$14.32$16.66
24$8.53$11.22$14.32$16.66
25$8.53$11.22$14.32$16.66
26$8.60$11.22$14.32$16.66
27$8.64$11.30$14.44$16.66
28$8.68$11.38$14.56$16.66
29$8.70$11.42$14.62$16.66
15 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
20$9.33$12.96$16.86$19.29
21$9.33$12.96$16.86$19.29
22$9.33$12.96$16.86$19.29
23$9.33$12.96$16.86$19.29
24$9.33$12.96$16.86$19.29
25$9.33$12.96$16.87$19.29
26$9.36$13.03$16.96$19.34
27$9.45$13.25$17.01$19.45
28$9.56$13.33$17.01$18.92
29$9.66$13.33$17.01$18.92
20 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
20$11.03$15.91$21.28$23.76
21$11.03$15.91$21.28$23.76
22$11.03$15.91$21.28$23.76
23$11.03$15.91$21.28$23.76
24$11.03$15.91$21.28$23.76
25$11.03$15.91$21.28$23.76
26$11.04$15.91$21.28$23.87
27$11.08$16.34$21.60$24.17
28$11.13$16.34$21.67$24.52
29$11.17$16.48$21.73$24.89
25 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
20$13.37$19.95$27.59$32.27
21$13.37$19.95$27.59$32.27
22$13.37$19.95$27.59$32.27
23$13.37$19.95$27.59$32.27
24$13.37$19.96$27.59$32.27
25$13.37$19.95$27.59$32.27
26$13.42$20.06$27.75$32.55
27$13.52$20.29$28.09$33.15
28$13.64$20.55$28.49$33.86
29$13.77$20.85$28.93$34.65
30 Year Term
FACE VALUE $250,000 $500,000 $750,000 $1,000,000
20$14.97$22.50$31.42$37.37
21$14.97$22.51$31.42$37.37
22$14.97$22.51$31.42$37.37
23$14.97$22.51$31.42$37.37
24$14.97$22.51$31.42$37.37
25$14.97$22.93$32.06$38.22
26$15.09$23.25$32.54$38.86
27$15.30$23.80$33.37$39.96
28$15.53$24.40$34.02$41.19
29$15.78$25.07$35.03$42.53
All sample quotes are based on a monthly premium as of 03/01/2020 from an A- Rated Carrier and higher. Sample quotes are for a preferred plus female. Rates are for informational purposes only and must be qualified for.

As you can see, life insurance in your 20s is very affordable, even for a 30 year term. And there are a handful of companies that offer 35 and even 40 year term life insurance.

So, you can really set your future self up by purchasing enough coverage and for a long enough time.

Which brings us to our next topic, how much coverage do you need?

How much insurance should someone in their 20s buy?

You can use our life insurance calculator to get a better idea of how much coverage you may need.

LIFE INSURANCE CALCULATOR

Adjust the sliders to fit your criteria. View your results below.

What’s your current age:
Expected college expenses for kids:
Burial costs:
Annual net income during retirement:
Number of years in retirement:
Money in investment accounts:
Annual investment contribution:

RESULTS

Based on your inputs, we recommend a life insurance policy with an approximate value of:
$0.00


Your total cost for
years of retirement at
per year is:


Assuming you retire at age
, you have
investing years left. Using a
annual rate of return for your investments, you're expected to earn a total of
.

Now, as for how much you personally should get, this is a tough question to answer.

The reason is because, chances are, if we look at what your “insurance needs” are today, you may not need as much insurance “today,” as you will need five or ten years from now.

The only problem is, five to ten years from now, when you do need that coverage, it’s probably going to cost more and/or you may not be able to qualify for as good of a rate for your insurance (if you’re still able to be eligible for coverage at all).

This is why…

We tend to like to focus on how much you would like to pay for your coverage and then work backward.

For example, if you’re “OK” paying 20 bucks a month, then let’s take a look at how much coverage you can qualify for at that price.

We tend to encourage individuals to take this approach because, let’s say someone thinks that they only need $100,000 in coverage right now, and they’re thrilled that it’s only going to cost $14.00 a month. Would they have paid $3.00 more a month to have $200,000, or maybe even $250,000?

Maybe?

We just wouldn’t know cause all we were focused on was what $100,000 in coverage cost.

Additionally, by taking the approach of allowing one’s monthly premium to guide what “kind” of policy one should choose, it also decreases the likelihood that someone will purchase a policy that they will later on need to drop because they can no longer afford their payments.

“But that’s only ½ the battle.”

Sometimes it doesn’t matter how inexpensive someone’s insurance is. They just can’t imagine needing a GIANT life insurance policy. The main reason for this is usually two-fold.

First, most 20 year old’s can’t imagine that they could pass away soon.

And second, it’s often difficult to determine just how much insurance you may need at such a young age.

So…

After doing some “soul searching,” you may determine that you need a $1 million life insurance policy. The only problem is that right now you can’t afford that much.

If this is the case, our advice is don’t buy that much because it’s difficult to ascertain just how much insurance one might need to protect one’s interests properly.

This is why…

Most financial advisors recommend that someone consider purchasing a minimum of 7-10 years of worth one’s salary as a good starting point.

So, if you currently earn $35,000 a year, this would mean that at a minimum, you should think about purchasing around a $250,000 life insurance policy. This, of course, would only cover “lost wages” for the next seven years.

But this amount wouldn’t take into account things like:

  • Existing debt on vehicles, or other recreational vehicles,
  • Credit card debt,
  • Private student loan debt (with or without co-signers),
  • Burial expenses,
  • College funds,
  • Etc…

This is why, even though you may not “feel” like you need to own a GIANT life insurance policy on yourself, the truth is, as a young man or woman with many years of earnings ahead of you, your insurance needs could be quite significant.

The good news…

Is that at your age, all this insurance that you may need will likely be priced at the lowest rate you will ever be able to qualify for!

What kind of life insurance should someone in their 20s buy?

Now, if figuring out how “much” insurance one needs was a bit tricky, then figuring out what “kind” of insurance one should buy may be downright hard! This is because there are generally two schools of thought when it comes to purchasing life insurance.

Some advisors…

Will say that everyone should always buy term life insurance because it’s more affordable.

“Which is true.”

In fact, term life insurance will generally be 5 to 10 times less expensive than a traditional whole life insurance policy.

Other reasons why many (if not most) financial advisors will recommend that people only by term life insurance is because most folks won’t need a huge life insurance policy for their entire life and because the “extra amount” of money one would pay for a whole life insurance policy would be better invested elsewhere.

Now…

This argument may make sense for you. In fact, this argument will make sense for about 90% of all of our clients here at IBUSA.

Still, we feel that it would be irresponsible for us to say that someone should ALWAYS buy a term life insurance policy and not even introduce the idea of buying a whole insurance policy because the truth is, each “type” of insurance will have their pros and cons.

For this reason…

We would recommend that all of our readers wondering which “type” of life insurance might be right for them to look at our following article: Term vs. Whole Life.

The good news…

Regarding what “kind” of life insurance policy one should buy is that because we here at IBUSA offer both types, we’re not going to try to convince you that one policy type is better than another.

If anything, we’re most likely going to suggest a term life insurance policy that will allow you to “convert” it into a whole life insurance policy later on if you so choose.

Which would then…

Just leave you with the decision regarding how long you would like to have your original term “set for”.

In which case, we usually advise our clients who are in their twenties to try and purchase the longest term possible (30 years or above).

What are “living benefits,” and how can they help me?

OK, so now you’ve figured out how much coverage we need. You’ve figured out what “kind” of life insurance policy we should buy, the last thing that we want to take a look at is if there are any additional “features” or “riders” that may be able to provide additional benefits that you may be interested in.

Many individuals who aren’t sure if they need to purchase a life insurance policy for themselves fail to recognize that a life insurance policy doesn’t always have to ONLY benefit your loved ones.

Sometimes (when structured properly), a life insurance policy can contain a lot of benefits that can also help an insured while they are alive (AKA Living Benefits)!

Benefits that can be…

Added to a traditional term or whole life insurance policy as a “rider” that is specifically designed to protect the living insured.

Living Benefit Riders such as a:

  • Disability income rider.

A disability income rider is an add-on available on some insurance policies that would allow the insured to receive a monthly payment if one becomes injured and cannot work for a period of time (possibly permanent).

  • Terminal Illness rider.

A terminal illness rider is an add-on that is available on some term or whole life insurance policies that will allow an insured to access some of their “death benefit” funds while still alive and battling their disease. Qualifying medical conditions will vary but will usually require one to be diagnosed with some type of terminal illness in which the insured is not likely to live beyond six to twelve months.

  • Critical Illness rider.

A critical Illness rider would allow a living insured to collect a portion of their life insurance policy to pay for unexpected medical expenses that may arise due to a medical emergency in which one is expected to survive. Examples of such emergencies may include suffering from a heart attack or a stroke, being diagnosed with cancer. In some cases severe injuries may also qualify.

  • A Chronic illness rider.

A chronic illness rider will provide many of the same benefits as a critical care rider, only in this situation, the qualifying event that would allow you to receive your benefit would be different in that this rider is designed only to “kick in” when someone is suffering from a “chronic” illness which is unlikely to be cured or cause one to die in the near future.

Now the really tricky part…

For most 20 years olds, when it comes to considering whether or not they ought to add a living benefit rider to their policy, most 20 years will have a difficult time imagining themselves one day needing any of these benefits.

For this reason, what we’ll usually recommend that they do is take a look at their family members and see if any of them would have benefited from owning a living benefit in their lives and then see if the additional cost of adding a living benefit to your policy makes sense.

How can I improve my chances of buying the best life insurance policy for me?

Here at IBUSA, we feel that the best way that you can improve your chances of finding the “right” life insurance policy for you is to keep doing what you’re doing.

That is, taking your time, doing your research, and when the time is right, reach out to an agent who is going to take their time helping you find the “best” policy for you, based on your needs and goals.

“An agent like one of those working here at IBUSA!”

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