Life insurance isn’t exactly the first thing that comes to mind when you think about financial priorities in your 20s or 30s. Retirement savings, buying a home, or even just paying down student loans might feel more pressing. But if you’ve found yourself wondering whether life insurance is worth it for someone your age, the answer might surprise you. Depending on your situation, getting life insurance now could be one of the smartest decisions you make for your financial future.

Why Consider Life Insurance in Your 20s or 30s?

It’s easy to assume life insurance is something you only need later in life when you have a spouse, kids, or financial assets. But the truth is, life insurance can provide financial security in a number of ways—even if those “traditional” reasons don’t apply to you yet.

Life insurance is designed to protect the people (or even the debts) you leave behind when you pass. While that might seem like a heavy topic to think about when you’re young and healthy, your current age and health are exactly why it can be a great time to lock in coverage.

The following factors highlight why young adults should consider life insurance earlier than many people think.

1. Are You Supporting Anyone Financially?

Having dependents, like children, a partner, or even aging parents, is one of the most common reasons to buy life insurance. If someone relies on your income to pay bills or meet their financial needs, a life insurance policy ensures they’ll still be taken care of if you’re no longer there.

Think beyond dependents, though.

  • Are you helping to pay a family member’s college tuition?
  • Sharing a mortgage?
  • Even indirect financial support, like splitting rent with a partner, can leave someone else vulnerable if your income unexpectedly disappears.

Life insurance offers support for these kinds of obligations, giving your loved ones financial breathing room during a difficult time.

2. Do You Have Debt That Won’t Disappear?

Many people assume their debts vanish after death, but that’s not always the case. Federal student loans are forgiven if the borrower passes, but private student loans often aren’t. If someone cosigned for any of your loans, like your college debt or a car loan, they would likely become responsible for paying those balances.

Even if no one cosigned, certain debts, like shared credit cards or mortgages, could become burdens your family or partner has to manage. A life insurance policy can eliminate these financial worries by covering outstanding amounts, ensuring others don’t have to carry your financial obligations.

3. Locking in Lower Premiums While You’re Young

One of the biggest benefits of getting life insurance in your 20s or 30s is affordability. Life insurance gets more expensive as you age because the risk of health complications and mortality rises. By getting insured when you’re young and healthy, you’re likely to qualify for the lowest premiums possible.

For example, a 25-year-old non-smoker in good health might pay less than $20 a month for a term life insurance policy. By contrast, waiting until your 40s or 50s could mean significantly higher premiums for the exact same coverage. Locking in affordable rates now can save you hundreds or even thousands of dollars over the life of the policy.

4. Planning for the Long Term

Life insurance isn’t just about what happens after you’re gone. It can also play a role in your long-term financial planning. For instance, some permanent life insurance policies build cash value over time, which can be borrowed against in the future.

If using life insurance as a financial tool appeals to you, it’s worth exploring options beyond basic term policies. That said, term life insurance is often the most cost-effective option when you’re young and starting out, as it provides straightforward coverage for a set period of time at a lower cost.

Do You Need Life Insurance Without Dependents?

Even if you don’t have kids or other dependents, life insurance can still provide valuable benefits. Here’s how it can come in handy, even if you’re flying solo.

  • Covering Funeral Costs: The average funeral can cost anywhere from $7,000 to $12,000, and that’s not a small amount for many families. A life insurance policy can ensure funeral expenses or final arrangements don’t impose financial strain on your loved ones.
  • Paying Off Shared Debt: Shared obligations like a jointly held mortgage or co-signed student loans don’t disappear after death. A life insurance policy can help ensure those debts are paid, so others don’t have to take on the financial burden.
  • Leaving a Legacy: Life insurance can also act as a financial gift to leave behind for causes close to your heart. If you’re passionate about a certain charity or want to set aside money for a younger sibling's education, naming them as beneficiaries allows you to make that impact.

How to Choose the Right Life Insurance

Life insurance varies widely depending on the type of policy, your needs, and your financial goals. If you’re unsure where to start, keep these tips in mind.

1. Understand the Types of Policies

The two most common forms of life insurance are term life insurance and permanent life insurance.

  • Term Life Insurance provides coverage for a specific period, like 10, 20, or 30 years. It’s affordable and ideal for young adults looking for basic protection.
  • Permanent Life Insurance lasts your entire life and includes a savings component that can grow over time. While it’s more expensive, it can be a good fit for those seeking additional financial planning features.

For most young adults, especially those focused on affordability, term life insurance is a practical choice.

2. Determine How Much Coverage You Need

The amount of life insurance you need depends on your financial situation. A common rule of thumb is to aim for coverage that’s 10 to 15 times your annual income. This ensures there’s enough to cover your debts, replace lost income for loved ones, and handle other financial needs.

If you’re unsure how much coverage is appropriate, online calculators or a conversation with an insurance agent can help you crunch the numbers.

3. Shop Around and Compare Policies

Just as you would with any significant purchase, it’s worth comparing options from multiple insurers. Rates can vary significantly, even for the same level of coverage, so don’t settle for the first quote you receive. Look for policies that balance affordability with enough coverage to meet your needs.

Action Steps to Decide if Life Insurance Is Right for You

If you’re weighing whether life insurance makes sense for you, start with these easy steps.

  • Assess Your Finances: Look at your current financial obligations and future goals. Consider your debts, dependents, and any long-term plans that others could be affected by.
  • Do the Math: Calculate how much coverage you’d need to comfortably handle expenses like debts, living costs for dependents, or funeral arrangements.
  • Consider Your Budget: Determine how much you can afford to spend on monthly premiums. Life insurance is an investment in financial security, but it should fit within your budget.
  • Talk to an Expert: If you’re unsure which policy is best, consult with a financial planner or insurance agent. They can help guide you toward options that align with your needs and goals.

By proactively evaluating your life insurance needs in your 20s or 30s, you’re setting yourself up for financial peace of mind down the line.