Guide
Life insurance for young adults explained
Having life insurance can be beneficial for people of all ages. But, as a young adult you may find it challenging to understand the benefits of having a policy. In this guide, we will cover everything you need to know about life insurance as a young adult.
If you're young and don’t have dependents yet, you might wonder if you need life insurance at all. While it may not seem necessary right now, getting a policy early can be a smart choice. It often costs less when you’re younger and healthier, and it can provide peace of mind for the future.
When should I take out life insurance?
There isn't a specific age when you should take out a life insurance policy; it really depends on you and your circumstances. Many people think about it when they have children or get a mortgage. They want to ensure their loved ones are secure if something happens to them.
But even if you don’t have dependents yet, having a policy can be a smart choice for future financial security of your loved ones.
Life insurance can cover any debts, like student loans or credit cards you may have. This way, your family won't have to worry about them if something happens to you.
How does age affect the cost of life insurance?
Life insurance policies usually cost less the younger you are. This is because young people are generally more likely to live longer than older people. Life insurance for young adults stays cheaper over time too.
If you took out a 30-year term life insurance policy aged 25, you’d pay a lower rate. It would also stay the agreed premium until the end of the term. If you took out the same policy at 45, you’d pay more each month for the duration of the policy.
What else could affect my life insurance premium?
Several factors can influence you life insurance premium - the amount you pay for your insurance cover. One important factor is whether you smoke or drink alcohol. If you smoke, your premiums will likely be higher.
Your overall health is another key factor. Insurance companies will ask about your medical history, including any health issues you might have. They may also want to know about your weight, as being overweight can sometimes lead to higher premiums.
Also, your job can affect your life insurance rates. Some jobs are riskier than others, like those that involve heavy lifting or working at heights. If your job is dangerous, the insurance company might charge a higher premium. There is a greater chance something could happen to you.
Learn more: How insurers calculate premiums?
Are there age limits for taking out life insurance?
When it comes to life insurance, there are no strict age limits, but different insurers have their own rules. Some insurance companies may allow you to start a new policy even in your eighties or older, although premiums will generally be higher as you age.
For younger individuals, life insurance can typically be purchased starting at age 18.
Children under 18 cannot take out a policy on their own. Instead, parents or guardians can buy life insurance for their children, usually covering those aged 17 or younger. One of the best options for insuring children is to add them to a parent’s or guardian’s existing policy.
Does my policy need to change as I get older?
As you get older, life will change. You may want to think about changing the policy when you are older. This is so you can increase or decrease the amount of cover you have. You might also consider changing the length of the term. If you decide to do this, it’s likely to affect the amount you pay each month.
For example, you might receive an unexpected sum of money. If you used this to pay off your mortgage early, you might decide you no longer need so much cover. If you have children later in life, you may want a longer term than originally planned. A change in policy could then reflect this.
Be aware that changing your policy later on may come with a fee. Also, you may not be able to change your policy if you are diagnosed with a health condition afterwards. Always check with your provider before making any changes.
Vitality life insurance
Want to know more about life insurance or thinking about taking out a policy? Here are some of the benefits of taking out life insurance with Vitality:
- A brand you can trust - In 2023, we paid out 99.7% of life insurance claims.*
- Get a lower monthly premium upfront when you add Optimiser to your plan. Keep your premiums low when you stay active.
- Access to Vitality partner discounts and rewards.
- Get free no-obligation advice. Our advisers offer expert advice to help you make the right decisions.
Last updated: 25 November 2024
*Vitality Claims and Benefits Report, 2024
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