The Top 4 Benefits of Buying Life Insurance at a Young Age
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TL;DR should you buy life insurance young?
Buying life insurance has two major benefits: cost savings and approval likelihood.
If you are a young person who expects future financial responsibilities and family, then it makes sense to buy life insurance at an earlier age. But if you do not have debts or dependents then you may not need life insurance right now.
1. Cost advantage: Lock in low life insurance rates early
The main reason to buy life insurance when you’re young is to lock in low rates early. Prices rise around 8% per year with age.
Right now, as you’re reading this, you’re eligible for life insurance rates that are lower than they’ll ever be again in your lifetime. This is not a scare tactic or a sales angle: it’s just how life insurance premiums are calculated.
Age is a key factor used in underwriting to predict your mortality and the risk of claims on your policy. The older you are, the closer you are to passing away, statistically speaking.
How the cost advantage works: Term life insurance premiums are fixed for the entire term length. So if you purchase a policy in your 20s, your loved ones will be covered when you’re in your 40s, and you’ll be paying a much lower rate than if you’d waited to buy the policy.
According to the Canadian Life and Health Insurance Association, the median age of life insurance policyholders in Canada ranges from 34 to 48.
How much could you save by buying life insurance at 20 vs. 40?
To give you a sense of how much you could actually save by buying early, we compared the changing cost of a term life insurance policy from PolicyMe.
We calculated the difference in cost of a $500,000, 20-year term policy for a healthy, non-smoking 20-year old applicant, then ran the same calculations for a 40-year-old applicant: still non-smoking, still in good health, but 20 years older.
The result? Customers who buy term life insurance from PolicyMe at age 20 can save from $649 to $40K+ over their whole policy term compared to those who buy at age 40.
* Savings shown are based on rates calculated for a $500,000, 20-year term life insurance policy from PolicyMe for a non-smoker of average health at ages 20 and 40. These are sample rates pulled June 2026.
In other words, by waiting to buy life insurance until you’re in your 40s, you could pay anywhere from $60/year to $1,000+/year extra based on your age alone — even if you’re in perfect health.
- Men stand to save around 25% more than women by purchasing life insurance at a young age.
- Term 10 life insurance sees the smallest variations in pricing based on age.
2. Coverage access: Larger coverage amounts
In addition to paying lower rates, younger life insurance applicants can actually buy more insurance coverage. Let’s compare the cost of a 20-year $500,000 life insurance policy at different ages.
*These are PolicyMe sample monthly rates for a non-smoker of average health for a 20-year, $500K term life insurance policy.
How coverage access works: As you get older, larger life insurance amounts will grow steadily out of reach because they will be too expensive. Buying younger can help you maximize your total amount of coverage without overpaying.
3. Approval advantage: Get approved more easily while you’re healthy
Fully underwritten life insurance is the most affordable option for Canadians in good health, and you’ll be asked about your overall health as part of your application. This helps the insurer set an appropriate cost for your coverage.
Age matters because, statistically, younger people have fewer health issues resulting in easier approvals and lower premiums.
- 46% of Canadians live with at least one major chronic disease (e.g. high blood pressure, arthritis) as of 2023.
- The risk of chronic illness increases with age.
4. Future planning: Protect your future family and financial promises
In your 20s, you may feel like you don’t know enough about your life to figure out if life insurance is worth it or not. You may not have set major financial goals like homeownership or starting a family, and your budget may be minimal.
How future planning works: Life insurance is the cheapest it will ever be for you right now. Any policy you buy now can cover any future dependents and debts you have, or even your parents as they age. Unless you’re struggling to make ends meet right now, life insurance could be an appropriate financial priority for you—even before you know what life holds.
When life insurance might not be a priority yet
If you don’t have dependents or debts—or if you simply can’t afford the monthly premiums—then life insurance coverage may not be the right priority for you right now.
Life insurance is an income replacement product designed to help loved ones who rely on your income and would struggle financially if you pass away.
You can probably wait if no one is depending on your income right now and you don’t have or anticipate any major joint debts. Term life insurance can be very affordable, but don’t push your budget if money is tight.
Some debts are discharged when you die if you don’t have enough assets to cover them, like student loans, personal credit cards, and income tax debt. Other debts (joint loans, joint credit cards, joint mortgages, and some spousal debts) remain on the books and your loved one is responsible for paying them off.
Self-assessment: should you buy life insurance young?
Buying young often makes sense if you want lower premiums, expect future financial obligations, or are concerned about future health issues that could impact your insurability.
But waiting may make sense if you have no dependents, no shared debts, plenty of savings, or you have more urgent financial priorities right now.
Here’s a quick checklist to help you assess whether buying life insurance young makes sense for you:
There are many ways to start building financial stability, if life insurance isn’t right for you at this time. If you’re young, contribute regularly to an emergency fund and pay down high-interest debt until your insurance needs become more clear.
FAQs: Benefits of life insurance at a young age
Bonnie Stinson is an insurance writer and researcher in Toronto with a decade of experience producing helpful, accurate content for Canadians. They have published resources for some of Canada's most innovative and consumer-trusted companies in the health, legal, and fintech sectors.
Bonnie Stinson is an insurance writer and researcher in Toronto with a decade of experience producing helpful, accurate content for Canadians. They have published resources for some of Canada's most innovative and consumer-trusted companies in the health, legal, and fintech sectors.