What's the Best Life Insurance for Young Adults?

It's the perfect time to go shopping for a policy.

Team LemonadeTeam Lemonade
young person life insurance

If you’re a young adult, buying life insurance may be the last thing on your mind. 

Your career and family life may be taking off. Maybe you’re focused on financial priorities, like building a nest egg or paying off all that college debt. Or hey, maybe you’re just trying to save a few bucks, enjoy your youth, and avoid dwelling on what’ll happen when you’re gone.  

However, life insurance can provide peace of mind for you and your loved ones, no matter the age. And while pondering your inevitable death isn’t much fun, being proactive is key. 

Here’s why it’s important for young adults to buy life insurance. 

Do young adults even need life insurance?

Many people think life insurance is just for married couples with kids. But it’s actually for anyone with financial obligations they want covered if they were to unexpectedly pass away—and most people fall into this category!

Consider this: the average funeral costs over $7,000. What’s more, if you cosigned a loan with someone (including student loans or a mortgage), you don’t want to leave them on the hook for the bill. 

It’s easy to overlook life insurance as an expense that can be put off until later, but investing in coverage now could save a lot of money down the road.

Everyone should have some sort of life insurance plan for themselves and their loved ones, regardless of age. Having a life insurance policy in place can ensure that your family will still be taken care of even if the unexpected happens. 

Why life insurance is a good investment for young adults 

There are some key benefits to buying life insurance as early as possible. 

•Young people tend to receive lower premiums on life insurance policies, so purchasing a policy while you are relatively young and healthy can lock in lower rates and make your entire policy more affordable in the long run. 

•Life insurance companies consider things such as lifestyle, age, occupation, family history, and any underlying medical conditions when assessing life insurance premiums. Therefore, the younger you are when purchasing life insurance, the lower the cost of life insurance will typically be. 

What type of life insurance should young adults get? 

When looking for a life insurance policy, there are two main types to consider: term life insurance and whole life insurance.

  • Term life insurance is typically purchased for a specific period of time, such as 10 or 20 years, and provides financial protection in the form of a “death benefit” paid to your chosen beneficiaries in the event of the policyholder’s death during that term. A term life insurance policy is generally simpler and more affordable than whole life insurance (a type of permanent life insurance).

    One caveat: Once your term is up, you’ll typically need to purchase another policy—likely with higher life insurance rates, since you’ll be older—in order to maintain coverage.
  • Permanent life insurance is a continuous policy that provides permanent coverage until the policyholder dies, as long as you keep paying your premiums.

    There are a few different types of permanent life insurance, including whole life insurance, universal life insurance, and variable life insurance. On the whole, permanent policies have higher premiums than a term life insurance policy. But, a permanent life insurance policy may also include other benefits such as a cash value feature that allows you to grow savings over time.

If you’re interested in pursuing a term life policy, Lemonade’s term life offering might be right for you. Click below to get started.

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What to consider when shopping for life insurance 

Shopping for life insurance can be daunting. Here’s a list of questions to consider during the process.

What type of policy is right for you?

To decide what type of policy is best for you personally, consider your financial situation, especially any debts you may have, or loved ones who financially depend on you or your beneficiaries. 

Some individuals opt for both term life and permanent life policies to give them the coverage they’re looking for. As a bonus, if you choose to purchase a whole life insurance policy, you’ll have more time to grow your cash value over time. 

Others may appreciate the simplicity and ease of a term life insurance policy, like the one offered by Lemonade. There tends to be fewer moving parts, and young adults in good health may find competitive rates.

How much coverage do I need?

When we talk about life insurance “coverage,” we’re referring to the amount of the death benefit your beneficiaries may receive if you were to die. So a “million dollar life insurance policy” would have a payout of $1,000,000. Generally, experts recommend buying coverage that is seven to 10 times your annual income.

If you’re not sure how much life insurance coverage to get, consider the financial stability of your family if you were no longer here—would there be income to replace yours? 

If not, having more life insurance coverage can help them stay afloat financially. Additionally, assessing your lifestyle expenses and debt obligations can provide further insight into the amount of coverage that’s suitable for you and your family. 

How much will life insurance cost for a younger person?

There’s no one-size-fits-all answer to this question, since your eligibility and rate depend on your medical history and other factors. But in general, being younger means you’ll probably pay a lower premium for life insurance. And with Lemonade’s term life offering, that rate will be locked in for the duration of your term.

Why do young adults generally enjoy lower life insurance premiums? Young people are less likely to die during the duration of their policy than someone who’s older, making them a lower risk for insurers. 

Because of this, paying for a life insurance policy at an early age can save you a lot of money in the long term and minimize financial stress levels down the line.

Getting the ball rolling

The best life insurance policy is one that matches your specific financial needs. Here are some key considerations that can help ensure you get the best rate.

  • Start by researching different types of policies that match the protection you need, then comparison shop for life insurance quotes from multiple providers to find the best rate.
  • Prioritize financial stability and coverage flexibility. If you’re considering a permanent policy, look for policies that stand up to the test of time by providing reasonable rates with inflation protection to maintain your coverage over the long-term.

While it’s usually not on the top of many young adults’ to-do list, having life insurance is the bedrock of any smart financial plan. Not only will it help your loved ones financially if something happens to you, but it will also give you peace of mind knowing that they will be taken care of. 

Applying for Lemonade’s term life insurance is simple and straightforward, with rates starting as low as $8/month.. You can get started right now by clicking the button below.

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A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states.


Please note: Lemonade articles and other editorial content are meant for educational purposes only, and should not be relied upon instead of professional legal, insurance or financial advice. The content of these educational articles does not alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. While we regularly review previously published content to ensure it is accurate and up-to-date, there may be instances in which legal conditions or policy details have changed since publication. Any hypothetical examples used in Lemonade editorial content are purely expositional. Hypothetical examples do not alter or bind Lemonade to any application of your insurance policy to the particular facts and circumstances of any actual claim.