Life Insurance For Young Adults – Forbes Advisor UK


When you’re young, the last thing you’re likely to be thinking about is buying life insurance.

Chances are, you’re focused on meeting day-to-day costs, and enjoying life. You may also believe life insurance is something that’s only worth considering when you’re much older.

But buying life insurance when you’re under 30 could save you a packet and, most importantly, provide financial security for your loved ones if you’re no longer around.

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At what age should you take out life insurance?

Buying life insurance isn’t dependent on your age – it’s about where you’re at in life (you can buy it once you’re 18). Whatever age you are, key life events may prompt the need for life insurance. These can include buying a property, getting married or having a baby.

Sadly, awful things happen no matter your age, as the impact of Covid-19 has highlighted – and life insurance is there to financially provide for anyone who depends on you. In other words, if you have dependents, you should have life insurance.

You’ll pay a monthly or annual premium and, if you die during what’s called the ‘term’ of the policy (you select this length of time – say, 25 years), a lump sum*, chosen by you, will be paid to your loved ones.

This can be used to clear a mortgage, say, pay for childcare, and provide a cash buffer to cover any other debts and day-to-day costs.

*There is a type of policy that pays a monthly income from the point of your death until the end of the policy term – this is often called family income benefit.

Why buy life insurance when you’re young?

First, if you need life insurance because you’ve got dependents, then you need life insurance because you’ve got dependents, no matter how young you are.

But the added benefit of taking out your policy when you’re young means your premiums will be lower than if you wait for a few years. Life insurance companies take into account your age and health when setting your premium and, other factors to one side, younger people pay less than older ones.

What impact does age have on life insurance?

If you take out a life insurance before you hit 30, you’ll pay far less. There’s plenty of healthy competition among providers, so you can shop around for cheap premiums.

For example, you’ll pay around £5 a month for £150,000 worth of life insurance at age 20. Wait until you reach 35-45, and this soars to about £18. By your 40s, the cost rises to about £20, and reaches more than £30 in your 50s. So, while you’ll pay for longer if you take out a policy when you’re young, you’ll pay less over the years in total, and be insured for longer too.


Let’s say, for example, a 20-year-old man pays £5 per month for a policy until he is 68 years old. That’ll cost him £2,880 for 48 years’ worth of cover. If he waits until age 30, and pays £12 a month, with a policy running until he is 68, the cost jumps to £5,472.

Of course, the amount you pay depends on a variety of factors, but for most people it’ll still save to take out a policy when you’re young.

What else affects the cost of life insurance?

Besides your age, your general health and job will also affect how much you pay. If you’re a smoker, you’ll pay more for your cover. How likely you are to suffer an accident at work can play a massive part in the cost. A desk job is considered far less risky than, say, manual work on a construction site.

The level of cover and type of policy you want will also impact on your premiums. The bigger the potential pay-out, the more you’ll pay. You’ll also pay more for particular types of life insurance – such as cover that runs throughout your life, rather than for a specific period.

But premiums tend to be cost-effective when you’re young, and can be tailored to your budget.

How can you find the best life insurance policy for young adults?

The different types of life insurance policies can seem baffling, and the right one for you will depend on your personal situation.

Typically, term insurance tends to be the most popular type for young people. You choose the term so you can arrange the policy to run until, say, your mortgage is paid off, or your kids are likely to be financially independent.

You can get ‘level’ term insurance, with the amount of cover staying the same for the length of the policy. Or, you can get ‘decreasing’ term insurance, which is cheaper. With this policy, the amount of cover reduces over the length of the policy – ​​this is often taken out alongside a mortgage, where the amount you owe decreases over time.

As mentioned earlier, family income benefit doesn’t pay a lump sum. Rather, it pays a regular amount (again, chosen by you) to your dependents each month.

You can buy life insurance that lasts for your entire life, regardless of how long you live – it’s known as ‘whole of life’ cover. It’s usually more expensive than term cover and it isn’t designed to do the same job – it’s usually bought for estate planning and investment purposes, rather than to protect your dependents against your unexpected and premature death.

What other things do you need to think about when buying life insurance?

  • Make sure the level of cover you have will pay for all the essentials – such as clearing your mortgage, alongside other debts too, if you wish, and ongoing living costs for as long as required by your family. As a general rule of thumb, experts say that around 10 times your salary is a good starting point, but make your own calculations.
  • If you’re not earning – maybe you’re looking after the home and children – you should still have life insurance. The proceeds of the policy could then be used to pay for these tasks to be done if you’re not around, enabling your partner to carry on earning.
  • Check what existing cover you have. If you’re an employee, you may find you have what’s known as ‘death in service’ cover as a work benefit. This usually provides four times your salary as life insurance, reducing the amount of cover you need to buy on your own policy.
  • Do you need joint life insurance, which covers both you and your partner? This can be cheaper than buying two policies, but consider the risks. If you passed away, your partner would get a lump sum, but they would then be left uninsured. And, if you both passed away at the same time, there will only be a single pay-out to those left behind.
  • Do you need critical illness alongside life insurance? These are often sold together, but it’ll increase the cost. Critical pays out if you’re diagnosed illness with one of the serious illnesses listed on the policy.
  • Do you have any particular pre-existing health conditions, and are you a smoker? Be honest with the insurer, or you risk invalidating your policy.

What if you’re over 30 and haven’t taken out life insurance?

It’s never too later to financially protect your family. Life insurance gets more expensive as you get older, but you can still get cover if you need it. You can even get cover if you’re retired, but most people take out policies while they’re still earning.

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Tailor cover to suit your needs and gain financial security for your loved ones

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