Life Insurance for Under 30s

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Posted 21st January 2021 by

Life Insurance is the legal requirement for an insurance company to pay a fixed sum to your family if you were to pass away during the term of the policy. A pay out can be used however the recipient deems suitable, but is often used towards the immediate costs associated with death, paying off outstanding debt and helping towards ongoing living costs.

What age should I take out Life Insurance?

According to Statista.com, of the 14.4 million UK adults that had life insurance in 2017, the majority were aged between 45 and 54. At this age range most adults own a property and have multiple dependents which they want to protect. Life insurance is a fantastic way to provide for your family if you’re not there, allowing them to pay off an outstanding mortgage and replace your lost income, often giving children the financial support whilst growing up they would otherwise have missed out on.

However, the cost of a life insurance policy is based upon personalised factors such as age, health and lifestyle. It can therefore be expensive to take out a policy later in life. The insurance premium will be significantly lower when you are younger and in perfect health, as opposed to if you have developed health conditions possibly due to older age. Your insurance cover is set at the time of application, so buying a term life insurance policy when you are young means you will lock in the best prices.

This young couple took out life insurance to avoid potentially higher prices if they took out insurance after age 30. They used a free broker (Protect Line) to compare the insurers and ensure they’d be paying the cheapest monthly payment available to them.

How much is Life Insurance for young people?

A life insurance company sets their premium cost based on the risk of you dying within the specified term of the life cover. The vast majority of people in the UK die naturally of old age. Of those who become seriously ill, this usually happens later in life. The insurance company also factors in the likelihood that you will cancel your policy before the end of the term and without making a life insurance claim. All of these reasons mean life insurance for an under 30 year old is extremely affordable.

However, just because the odds of living are in your favour it doesn’t make you immune from critical illness such as cancer (165,000+ UK deaths per year) or from accidental death such as car accidents (1,750+ UK deaths per year). Getting a life insurance policy whilst you are younger means you not only take advantage of the low cost, but you lock in these premiums for the remainder of your term. After the age of 30 the life insurance cost jumps significantly. For the cheapest life insurance with the highest lump sum payment, your future self will likely thank you for purchasing life cover now and never missing a premium.

AgeCover AmountPolicy TermFixed Premium
28£200,00025 Years (age 53)£6.81
28£500,00025 Years (age 53)£11.99
35£200,00018 Years (age 53)£8.86
35£500,00018 Years (age 53)£16.01

Quotes generated by Protect Line on the Webline Service and are accurate as of 21/01/21, based on someone with perfect health & lifestyle

Do I need Life Insurance if I’m in my 20s?

The main reasons for buying a life insurance policy is so your family can pay off your biggest debt – your mortgage – and help with childcare costs without your income. However, in the UK the average age of home ownership is 34 and having children is 28. Therefore, if you fall outside these categories, you may be wondering whether life insurance is a waste of money if you’re in your 20s.

The truth is that if you don’t have any major debts or have financial dependents then it’s understandable that life insurance may not make sense to you… you might rather keep the money in your bank account. However, even if you died without a mortgage or kids, it is still worth knowing that the average cost of a UK funeral is £9,4931 and considering where this money might come from.

Looking past your immediate risk though is where getting a life insurance policy as a Generation Z or Millennial can make financial sense. When you purchase a term life insurance policy you lock-in the monthly payment. Unless you purchase an inflation add-on, this premium will not increase and therefore when your circumstances change (buy a house or have children) you will be suitably covered for significantly cheaper than people who waited to purchase beyond the age of 30.

Why would a 24 year old buy Life Insurance?

Although statistically those under the age of 25 rarely buy life insurance, it is not unheard of and anyone over the age of 18 in the UK is eligible to have a policy. Whilst some young people will buy a life insurance policy and critical illness cover to protect their future family’s financial stability for the lowest price available, most 18-24 year olds get life insurance cover when they first have a baby or buy their first home.

24 year old Amelia tells other parents why it’s so important to get a life insurance quote.

Why should healthy people buy Life Insurance?

Factors such as smoking, excessive alcohol intake, drug usage and being overweight can have a serious impact on the price of life insurance. Therefore, applying for life insurance when you’re at your healthiest will undoubtedly lead to lower premiums. When you purchase life insurance you usually lock-in the price for the remainder of your term, based on the health and lifestyle questions asked during the quotation stage.

Some insurers, such as Legal and General, may allow you to increase your cover amount in the future without answering any further health questions or undertaking medical exams. This means that if you took out £200,000 of cover when you were young and healthy, but in 5 years time wanted to increase your protection by £100,000 then you could, even if you’d since developed a health condition or started smoking. There is small-print attached to these clauses, such as the option only being available within 6 months of the birth or adoption of your child and an increase of no more than 50% of the original insured amount, but ultimately getting life insurance when you’re healthy gives you more (and cheaper) options in the future as your life changes.

Is Life Insurance good value for young adults?

Protecting your downside for the price of a few pints a month makes perfect financial sense to most people. Who would pay for your funeral if you were to pass away suddenly? If or when you get a mortgage will this become a burden to the people you love once you’re no longer here? If you have children or intend to have them one day would you want to protect them from financial struggles if you were to pass away or become terminally ill?

Buying life cover insurance as a young adult allows you to lock-in cheap life insurance, meaning that you can get the same fantastic protection as the millions of UK adults with life protection, but you will end up having paid significantly less for your cover at the end of a potential 30 year term.

If you are 22 and buy £100,000 of life insurance until the age of 52 you might pay as little as £2.48 per month. Over the whole term, if you didn’t claim, you’d have paid a total of £892.80. For those 30 years you protected yourself for over x112 the cost of your policy.

If you decided not to purchase when you were 22 and instead get the same insurance when you were 40 you might be paying about £12 per month. This is based on 2021 prices and a 3% annual inflation, but doesn’t take into consideration that your health may have worsened over the next 18 years. Over the 12 year term until age 52, if you didn’t claim, you’d have paid a total of £1,728. For those 12 years you would be protecting yourself for x57 the cost of your policy.

As you can see from the example, policies are significantly better value for money the earlier they are taken. You’re also much more likely to keep paying the direct debits over the policy term when they are smaller, whereas larger direct debits are at risk of threatening your day-to-day cost of living. The moment a premium is not paid to the life insurance company, then any claim could be invalidated.

Get a free life insurance quote today

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Family illustration
Protection plans with no investment element will have no cash-in value at any time and will cease at the end of the term. If premiums are not maintained then cover will lapse.
Critical illness plans may not cover all definitions of a critical illness. The definitions vary between product providers and will be described in the Key Features and Policy Document if you go ahead with a plan.

1 https://www.sunlife.co.uk/siteassets/documents/cost-of-dying/SL-cost-of-dying-report-2020.pdf/

James Holden

Experienced marketing specialist within Financial Services, having managed hundreds of effective digital marketing campaigns for numerous UK insurance and mortgage brands since 2016.

From creating the world’s first Pokémon Go insurance, to launching a new product category within the appliance insurance space, to designing chat-bots which compare homeowner loan rates… I enjoy making consumer finance accessible to all and fun where possible!

I joined Protect Line in early 2020, a time when a lot of people started to seriously consider life insurance for the first time. Our lives can change in an instant, often without warning, and I love working in an industry which supports families during their most difficult times.