Should I Get Life Insurance In My 20s? (2026 Guide)

TL;DR: Should I get life insurance in my 20s? 

Life insurance may be worth it in your 20s, but whether you need coverage depends on your financial situation and long-term goals. In general, you should consider a life insurance policy if you have:

• Dependents: Your partner, children or parents rely on you or your income for support.
• Cosigned debt: Your debt is tied to a co-signer and may be left entirely to them if you were to pass away.
• A mortgage: Life insurance can help cover the remainder of your mortgage if necessary.‍
• Financial future plans: Life insurance rates are typically lower for young adults, so buying a policy in your 20s can help you proactively lock in a lower premium and coverage for what’s ahead.

Buying early can save you thousands

Life insurance rates are typically determined by taking into account personal factors like health and age. Prices rise by ~8% per year with age. Buying coverage in your 20s may mean lower monthly costs compared to buying later.

You may not need life insurance yet if you have no dependents or major debts

Life insurance may not be necessary in your 20s if you don’t have any major debts or dependents who rely on you for financial support. For those who are early in their career, have yet to start a family, or do not have any major debt, like a mortgage, it may be worth holding off on purchasing a policy. 

That said, getting coverage while you’re young and healthy can help you lock in lower premiums. Life insurance providers typically use age and health to calculate policy rates, so if you’ll eventually need a policy to support future responsibilities, buying earlier in life can save you from facing higher costs if your health changes over time.

Key benefits of buying life insurance in your 20s

Life insurance is a tool for individuals that want to provide their loved ones with financial stability for current or future needs in the event they pass away. A tax-free life insurance payout can be used to pay off debts or mortgages, replace lost income, manage future family planning and more.

Getting life insurance in your 20s can put protection in place for the future and provide strategic advantages that you may not have as you get older. Benefits of buying life insurance at a young age include:

• Lower premiums while you’re young and healthy
• Coverage secured before your health changes
• Preparation for long-term financial responsibilities

Lower premiums while you’re young & healthy

One of the long-term advantages of getting life insurance in your 20s is lower premiums. The risk of insuring you increases as your health naturally deteriorates with age, meaning insurance providers are more likely to offer you a lower premium while you’re young and healthy. 

Life insurance rates also typically remain the same throughout the span of your policy unless you change your coverage amount or policy type, so buying earlier in life can help you lock in a lower premium and reduce the total cost of life insurance during your policy’s active years. 

“Many people think life insurance is just a payout when you die. In reality, one of the most important features is how premiums are locked in for a set term. Once that term ends, renewal rates can jump dramatically. Understanding this helps you choose the right amount and term length up front, avoiding surprises later.” — Luke Robar

Locking in coverage before health changes

Your health is a key determining factor when it comes to your life insurance costs, eligibility and flexibility. Primary benefits include: 

• Premium impact: Health conditions such as high blood pressure and heart disease typically impact life insurance premiums. Getting a life insurance policy before any significant changes to your health can help you lock in a more affordable premium that lasts the duration of your coverage.
• Coverage eligibility: While your health is in good standing, you also have more options and flexibility when selecting your coverage. A good bill of health can open the door to a wider range of coverage options that might otherwise be limited if you have certain health conditions in the future. 
• Conversion flexibility: Some term life insurance policies include the option to convert to permanent life insurance without additional medical underwriting. Applying for coverage in your 20s with little to no health issues can help you lock in this option for future planning.
• Underwriting efficiency: Without any outstanding medical issues, you may also be able to skip additional medical underwriting or medical exams, ensuring a smoother application process.
• Insurability and application processing: A future health condition could prevent you from getting coverage if the condition is deemed severe. For some medical concerns, your application may be delayed due to additional underwriting or testing.

Covering shared debts and future obligations

In your 20s, life insurance can act as a financial planning tool to help protect your loved ones from current or potential financial responsibilities that could impact them if you passed away. 

Did you know?

1 in 4 Canadians are unsure their family would be financially secure without them, while 80% with life insurance feel confident in their family’s financial security without them, finds the PolicyMe Life Insurance Gap Report.

For some young adults, buying coverage in their 20s aligns with long-term goals like buying a home, getting married, or having children who would be financial dependents. Having life insurance early can provide flexibility, peace of mind, and an added layer of financial protection as your responsibilities grow with age.
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Case study: Alexi’s early life insurance plan

Alexi, 26, recently got engaged and plans to buy a home with his partner within the next year. He also has outstanding student debt that was co-signed by his mom. He doesn’t have children yet, but his financial responsibilities have grown beyond himself.

Alexi decides to buy a 30-year term life insurance policy to protect his loved ones and reduce any financial burden tied to shared debt, future mortgage payments, and other long-term obligations if he were to unexpectedly pass away.

How much does life insurance cost in your 20s?

Life insurance rates vary from person to person based on individual circumstances and risk factors. In general, Canadians in their 20s get some of the most affordable life insurance rates, averaging around $20 per month for a healthy non-smoker with $500K in coverage.

Here’s an overview of the average costs of term life insurance rates for non-smoking men and women between ages 20 and 29:

^{*Average starting monthly PolicyMe rates for non-smoking individuals of average health, aged 20-29 years.} 

What affects the cost?

Life insurance rates are determined by individual various factors. Here’s what insurance providers typically consider when calculating your life insurance premiums:

• Age
• Health and medical history
• Sex
• Smoking status
• Coverage amount
• Policy type
• Length of the policy term
• Policy add-ons or riders
• Alcohol and drug use
• Occupation
• Hobbies or high-risk activities

Each provider uses a unique underwriting method to calculate Canadian life insurance rates, so the premium you get from one provider may be different from the next. 

How much life insurance should someone in their 20s get?

The amount of life insurance you need in your 20s depends on your current financial obligations and future financial goals. 

Many Canadians opt for life insurance coverage ranging between $250,000 to $1M, but the right death benefit amount for you should reflect your financial responsibilities, such as covering shared debts, preparing for homeownership, and supporting a partner or dependents.

The most common formula for calculating life insurance coverage needs is the DIME method, which accounts for the cost of your debt, income, mortgage and education (for dependents).

Here’s an overview of how you can use the DIME method:

• Debt: Add up any debts (student loans, credit cards, vehicle loans, etc.)
• Income: Calculate your annual salary plus any additional income. Multiply it by the number of years you’d like your life insurance policy to cover.
• Mortgage: If applicable, add your total outstanding mortgage balance or consider your future homeownership plans.
• Education: Add up or estimate education costs and any other major expenses related to your current or future dependents, such as childcare expenses. 

Once you calculate your debt, income, mortgage and education needs, you’ll get a total amount that reflects your ideal life insurance coverage amount. With a coverage amount in mind, you can begin to seek policy quotes from providers, or speak with a life insurance broker to uncover the best policy and rate for your coverage needs.

“To keep premiums low and still get meaningful protection, buy the amount of coverage your family would truly need for things like the mortgage, education, and living costs. Apply early while you’re young and healthy, since that’s when rates are lowest and you can lock them in for your full term.” — Jeremy Burbano

What’s the best type of life insurance for people in their 20s?

The best life insurance for people in their 20s is generally term life insurance. Term life insurance is usually the most affordable life insurance policy type, especially for young and healthy applicants, making it a great fit for individuals in their 20s with early-career budgets. 

Term policies also offer a straightforward and simplistic approach to covering common temporary financial responsibilities for a set period of time, such as:

• Student debt with co-signers
• Mortgage
• Future family planning
• Income replacement
• Saving for a home
• Investing
• Building emergency savings

Term life plans are generally available in 10-, 20-, 25-, and 30-year terms. Your term length will impact your premium, but even premiums for the longest term lengths are fairly low for individuals in their 20s. 

Term life premiums also typically remain the same throughout the full term, so if you’re able to lock in a low rate during your 20s for a 25-year term, you could potentially save thousands of dollars over the duration of your policy.  

Unlike permanent life insurance policies, which are more expensive and may include a cash value component, term life insurance is also much easier to manage—as simple as paying a monthly premium. Many term policies also include the flexibility to convert to a permanent policy in the future if necessary, so your options aren’t limited. 

When might permanent life insurance make sense? 

Permanent life insurance provides lifelong coverage, which typically makes sense for high-net-worth individuals or people with long-term financial responsibilities, including: 

• Estate planning
• Lifelong dependents
• Advanced tax planning

Note that permanent life policies, like whole life or universal life insurance, typically cost anywhere between 5 and 10 times more than term life insurance due to their guaranteed payout and potential investment component.

For many people in their 20s, the cost of permanent life insurance may outweigh the benefit of a lifelong policy because most young adults don’t have long-range financial obligations. For those just beginning to explore new financial priorities, expensive permanent life insurance premiums can also take away from active obligations, like paying off student loans, saving for a home, building an emergency fund or investing.

Bottom line: Is life insurance the right choice for you at this age? 

Getting life insurance in your 20s can be a wise financial choice depending on your personal circumstances and financial responsibilities. In general, keep in mind:

• Life insurance can help protect your family members from financial burdens tied to debts, mortgages, future family planning and income loss.
• Applying while young and healthy can help reduce long-term insurance costs.
• Choosing between term and permanent life insurance depends on your financial goals, budget and long-term coverage needs.
• Life insurance may not be necessary yet if you don’t have dependents or major financial obligations.

FAQs: Should I get life insurance in my 20s?