Life insurance in your twenties

When you probably don't need much yet

If nobody depends on your income, you have no co-signed debt, and no obligations that would land on someone else, a large policy may be premature. That's a legitimate conclusion.

Note the exceptions though: private student loans with a co-signer, and any debt someone else guaranteed, don't necessarily disappear.

When you do

• Anyone relies on your income, including a parent or sibling
• You have private student loans with a co-signer
• You share a mortgage or lease with someone
• You have children or expect them soon
• You support family financially, including abroad
• There's family medical history that could affect future insurability

The insurability argument

The strongest case for buying young isn't the premium — it's that you can. Health conditions that develop later can make coverage expensive or unavailable, and you can't buy insurance against something that has already happened.

That's why a policy bought now at a modest amount, particularly one with conversion or guaranteed insurability options, is buying an option on your own future.

The feature worth paying slightly more for

A conversion option lets you move a term policy to permanent coverage later without new medical underwriting. It costs little now and is worth a great deal if your health changes.

At twenty-five it feels like a technicality. It's precisely the point at which it's cheapest to secure, and the point at which people skip it.

Don't over-buy either

A young adult with no dependents being sold a large permanent policy as an investment should be sceptical. Cash value products are legitimate for some goals and are frequently oversold to this group.

Term coverage sized to actual obligations, plus a conversion option, covers most situations at this age.