Should I Get Life Insurance in My 20s?

Life insurance pays a death benefit to the policyholder’s loved ones if the policyholder passes away, making it a added safety net to pass on.

Life insurance is not just for older adults or families, either. Shopping for life insurance quotes in your 20s can offer distinct advantages that help set you up for a more secure financial future.

This article will explain why life insurance can help in your 20s and cover a few policy types you may consider at this stage of life.

Types of Life Insurance

Two broad types of permanent life insurance for young adults exist:

Term Life Insurance

Term life insurance covers you for 10-30 years, depending on your choice. Coverage can expire, necessitating a renewal or a new policy to maintain coverage.

However, term life insurance offers the most coverage per dollar, making it easier to fit several decades of life insurance coverage into your budget as a younger adult.

Permanent Life Insurance

Permanent life insurance lasts for life if you continue paying premiums. This type of insurance also comes with a cash value component, which grows with each payment and earns tax-deferred interest.

When the cash value component grows enough, you can do the following:

• Get a loan: Borrow against your cash value at low interest with no credit check or fixed repayment date.
• Withdraw: You can take money out of your cash value. This may reduce your death benefit and could be taxable.
• Surrender: Surrendering your policy lets you get the cash value minus surrender charges.

Permanent life insurance charges higher premiums, making it more suitable if you have a larger income. That said, different permanent policy types vary in their average premiums.

Here are some permanent life insurance types:

• Whole life insurance: Whole life insurance cash value offers fixed premiums and death benefits. The cash value grows at a low but guaranteed rate. This policy is typically the most expensive permanent life insurance policy.
• Universal life insurance: Universal life insurance works like whole life insurance but lets you adjust your premiums and death benefit. You can also use cash value to pay premiums.
• Variable life insurance: Variable life insurance works like universal life insurance. However, it lets you invest your cash value into various funds that hold assets like stocks, bonds, and other securities. This can offer more potential growth but higher risk levels. Young adults could benefit from this since they have a longer time horizon, allowing them to take on more investment risk.

Benefits of Getting Life Insurance in Your 20’s

Life insurance can offer several benefits to you if you’re in your 20’s:

Lock in Low Premiums

Life insurance premiums increase with age. However, once you purchase a policy, you lock in those premiums for the policy duration.

Getting life insurance in your 20s can help you secure the lowest rates on your coverage. This is especially helpful for permanent life insurance as it brings down the higher premiums and makes lifelong coverage more attainable. You won’t have to worry about getting new coverage at higher rates later.

Build More Wealth Over Time

If you get a permanent life insurance policy in your 20s, you have more time to build cash value since you pay premiums for longer and get more time to let your cash value earn interest.

This could pay off later in life by giving you a substantial cash value to tap into. The cash value could help with financial goals, such as purchasing a home, starting a family, or funding your future children’s college.

Added Peace of Mind

Getting life insurance when you’re younger creates peace of mind. You complete a crucial piece of your financial planning earlier in life, knowing your loved ones are covered if anything happens to you.

Consider Life Insurance, Even When Young

Life insurance can work at any age, even in your 20s. Of course, whether you should get life insurance in your 20s depends on your financial situation and goals.

If you have a young family, have complex financial goals, or have budgetary room and plan on getting life insurance at some point, getting life insurance in your 20’s may make sense.

Determine which policy type best suits your needs, then shop for multiple life insurance quotes to find the best rates on the coverage you need.

Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.

Life: 68000: In Arkansas, Idaho, Oklahoma, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. 65000: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000: In AR ID, OK, & VA, Policies: ICC18B61JWO & ICC18B61JTO. In DE, Policies B61JWO, B61JTO. B60000: In AR, ID, OK, & VA, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 whole: In AR, DE, Policy Q60100M. In ID, Policy Q60100MID. In OK, Policy Q60100MOK. Q60000 term: In DE, Policies Q60200M. In AR, ID, OK Policies ICC18Q60200M, ICC18Q60300C, ICC18Q60400C.

Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).

Final Expense: Arkansas, Delaware, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Aflac Final Expense policies are not available in New York.

Coverage may not be available in all states, including but not limited to, DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions.

Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.

Aflac WWHQ | Tier One Insurance Company | 1932 Wynnton Road | Columbus, GA 31999

Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211

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Contact: Angie Blackmar, 706-392-2097 or [email protected]