Data Shows Younger Adults Are Looking to Buy Life Insurance. Here’s Why That’s a Good Idea

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Applying for life insurance when you’re young could work to your advantage. Read on to learn more. 

The gift of life insurance is one of the most important ones you might give to your loved ones. By putting a policy in place, you can buy the people you care about financial protection so that if you were to pass away, they’d still be able to pay their bills and function.

Meanwhile, data from LIMRA shows that 44% of Generation Z adults and 50% of millennials are planning to get life insurance coverage this year. And if you’re on the younger side, you should know that applying sooner rather than later could work to your benefit, too.

It’s a matter of risk

There’s a reason younger life insurance applicants tend to snag lower premium rates on their coverage. In the eyes of life insurance companies, younger applicants tend to be in better health, and therefore, they’re looking at less risk.

Remember, life insurance companies don’t want to have to pay out on the policies they write. So it’s in their best interest to insure candidates who come across as unlikely to pass away over the course of their coverage window. (As a point of clarity, if you buy whole life insurance, your coverage will be permanent. But term life insurance will run out on you at some point in time.)

While applying for life insurance at a young age could result in big savings, you should know that it’s not just age that insurance companies consider when writing policies. Health is a big factor, too. So if there are aspects of your health you have the potential to improve upon, it could pay to do so before you submit any life insurance applications.

As an example, quitting smoking before getting life insurance could result in lower premiums. So could losing weight. These aren’t necessarily things you can do overnight. But are they possible in the course of a few months? Potentially.

The savings could be huge

Being young won’t always guarantee that you’ll end up paying less for life insurance. But if you’re young and in great health at the time of your application, you might enjoy a world of savings.

As a point of comparison, Dave Ramsey says the average cost of a 20-year, $1 million term life insurance policy is $52 a month for a 28-year-old non-smoking male. By contrast, the average cost of that same coverage for a 36-year-old male non-smoker is $64 a month. And for a 40-year-old man who doesn’t smoke, it’s $84 a month.

Now, it’s worth noting that these rates are slightly lower for women, since they’re generally considered less risky by life insurance companies due to their longer lifespans. The point, however, is that the cost of life insurance tends to rise with age.

As such, if you’re able to apply for life insurance on the younger side, it might result in premiums you can more easily afford. And remember, you don’t need to reach a certain age for life insurance to make sense. Once you have someone in your life who depends on you financially, life insurance becomes something worth paying for.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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