The younger you are, the cheaper your premiums

Life insurance is often considered a product for those in later life, but actually there are many benefits to arranging cover as a young adult.

Life insurance for young adults starts from as little as 20p-a-day.

Arranging cover at this time allows you to take advantage of your age and good health, locking in super-low premiums.

Our FCA regulated broker service enables you to compare quotes and secure the best deal.

Simply get in touch today for your free, no-obligation quotes.

Read on for more information on how best to secure affordable life insurance as a young adult…

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Importance of life insurance for young adults

Generally speaking, life insurance pay outs are commonly used to:

  • Pay off your mortgage or cover your long-term rent
  • Maintain your family's current lifestyle
  • Meet family living costs
  • Leave an inheritance to loved ones
  • Clear any outstanding debt
  • Cover the cost of your funeral

In young adulthood, it’s easy to overlook aspects like your funeral or leaving an inheritance.

You may not even have a mortgage or started a family yet.

But life insurance policies can last for over 40 years, during which time the unexpected may happen and many of the above may come into play.

The cost of life insurance is calculated at the point of application. Any changes during the policy, such as your health, won’t increase your premiums.

Therefore, taking out a policy whilst you’re young allows you to benefit from low-cost premiums, even as your lifestyle and responsibilities evolve.

It also means that you’ll avoid paying higher premiums later in life if you were to fall unwell and need to take out a policy.

How much life insurance do you need?

Enter your financial commitments below to understand the level of life insurance cover you need as a young adult.

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£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.
£
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According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.
£
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The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.
£
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You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.
£
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According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.
£
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If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.
£ -

Your total cover estimate

£ 0

Let us find your best quotes.

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How much is life insurance for a 30-year-old?

At Reassured, we can arrange life insurance cover from just 20p-a-day.

Despite this, 65% of 18-29-year-olds don’t have any life insurance protection in place[1].

Insurers calculate the cost of your life insurance premiums based on the level of risk you pose to the insurer.

Life insurance providers take into account:

  • Age
  • Health
  • Smoking status
  • Type of policy cover
  • Length of term
  • Amount of cover (sum assured)

Being a young adult means you can benefit from lower premiums due to your age and likely better health.

To arrange affordable cover today, contact Reassured for your free quotes.

Best life insurance companies for young adults

Whilst certain life insurance companies specialise in providing cover for the older generation, it's rare to see a company that specialises in young adults.

As a result, the best life insurance company for you will be one that provides the type of cover you require at the lowest price.

At Reassured, we compare quotes from a wide variety of insurers to ensure you receive the best available deal.

And the best part is our award-winning quote service is free to you.

What is the best life insurance for young adults?

The best type of life insurance for a young adult will depend on your individual circumstances.

There are a number of policy types available, each better suited to protecting certain aspects within your life.

Therefore, the best life insurance will be the one most suited to meet your specific needs, within a budget you can afford.

Read on as we explore the different types of life insurance cover available…

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Term-based life insurance for young adults

The most common forms of life insurance arranged by young adults are term-based.

This describes a policy that provides cover for a specified period of time, (the term). If you die within this time frame, a pay out is made to those named on your policy.

There are two main types of term-based life insurance.

Level term life insurance - This is likely to be the most suitable policy type for those looking to protect future assets.

For example, if you’re likely to have a family and/or purchase a property but haven’t yet.

The sum assured with level term cover holds its value throughout the policy term. Making it suitable to cover an interest-only mortgage.

This means that whether you die 2 or 20 years into the policy, the amount received by your loved ones remains fixed.

Decreasing term life insurance - Unlike level term cover, the sum assured with decreasing term cover reduces throughout the policy term.

For this reason, decreasing term life insurance is well suited to cover a repayment mortgage.

As the level of risk to the insurer reduces over time decreasing cover is cheaper than level term.

With either term-based option, it’s possible to outlive your policy and not receive a pay out.

At Reassured, we can compare level term vs decreasing term, so simply get in touch today for your free quotes.

Whole of life insurance for young adults

In the instance of a young person taking out life insurance, it’s unlikely to make financial sense to opt for a whole of life insurance policy.

Whilst whole of life insurance guarantees a pay out, it’s possible, if you live long enough, that you’ll end up paying more into the policy than it will pay out.

If you’re young and healthy, the likelihood of this is high. As a result, most young adults opt for term-based cover.

Cheap life insurance for young adults

Nowadays, it's common for many young adults to have limited disposable income.

As a result, taking on another monthly outgoing, such as life insurance, can seem unnecessary.

However, there are a number of steps you can take to ensure you don't pay more than is necessary.

  1. Take out cover as young as possible to avoid inflated premiums due to age - Young adulthood is an ideal time
  2. Live a healthy lifestyle - In young adulthood, you're less likely to have experienced health implications. Stopping smoking will also help
  3. Arrange the right type of cover to meet your needs to avoid paying for a more expensive policy than is required
  4. Only arrange the level of cover you require to avoid paying for unnecessary protection
  5. Always compare multiple quotes to ensure you receive the best available deal

How much life insurance do I need?

When determining how much life insurance do I need it’s often recommended to calculate the value of what it is you’re looking to cover.

For example; any debt in your name + your mortgage + funeral costs + inheritance + family living costs = sum assured.

When arranging life cover as a young adult consider the different elements you currently need to protect and those which may come into play in the future.

For example, currently, you may only need to consider the cost of your funeral but maybe looking to buy a property and start a family in the near future.

The sum assured you choose should be capable of covering all aspects.

Taking out enough cover to protect all potential future avenues allows you to lock in lower premiums.

However, even if you're unsure of what the future holds, there's still the option to increase your cover at a later date with a special events option.

Special events option

A special events option allows you to increase the amount of cover you have in place without the need for additional underwriting.

It can be used for major life events such as, buying a bigger home or having a child.

This is ideal if you've arranged life insurance as a young adult but your existing policy no longer provides the level of cover required to protect the financial commitments in your life.

The specific circumstances in which you can increase cover may vary between providers and will be outlined in the policy.

If you choose to increase the amount of cover, then your premiums will also increase to cater for the greater level of cover.

Not all policies include this special events option, also known as ‘guaranteed insurability option’, and eligibility for this will be dependent on your individual circumstances.

To discuss special events options, contact our award-winning team who'll be happy to help.

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Affordable life insurance for young adults

The best way to arrange affordable life insurance if you're a young adult is to compare quotes from multiple insurers.

Using an award-winning, FCA regulated life insurance broker, such as Reassured, allows us to do all of the hard work for you.

We compare quotes from multiple insurers to find you the right cover at the best price.

Alternatively, you could use a comparison website or carry out research yourself online, although the latter can be very time-consuming.

Contact us today to obtain your free quotes and let us save you time and money.

Should you get life insurance when you are young?

The main benefit of arranging life insurance in early adulthood is that your premiums will be significantly lower.

However, the main decision when determining whether you should arrange life insurance when you're young depends on whether or not someone would be financially impacted as a result of your passing.

Whilst you may not have a steady partner or children, the cost of your funeral will still need to be covered.

The average cost of dying has risen by 128% over the past 16 years and now resides at £9,263[2].

If the value of your estate is not sufficient, your loved ones will be required to foot the bill.

Therefore, meaning that even at a young age you would benefit from having some life insurance in place.

Ultimately, the younger you arrange life insurance, the cheaper it is, suggesting that regardless of age, the sooner you arrange cover the better.

Young adults with dependants

When you’re young it’s easy to overlook the impact your passing would have on family.

Aside from the emotional turmoil caused, there are also financial concerns which should also be taken into consideration.

In life insurance terms, there are two types of young adults; those with dependants and those without.

A dependant refers to someone who is affected by your financial stability, for example, a child or a partner.

It’s easier to understand the importance of life insurance for those with children in their lives.

In the event of your death, all outstanding balances (such as your mortgage or credit cards) are settled by the value of your estate.

This means that any savings you have and any property you own will be used to cover the outstanding costs in your name.

This can cause severe financial instability for your dependants, particularly if the home used to settle your debts is the one in which they live.

If they can’t cover the outstanding debts, the family home may need to be sold.

Having adequate life insurance can ensure the future financial stability of your loved ones.

Life insurance for young parents

The average age of becoming a mum in the UK is 30 and a father is 33[3], both of which would be considered young adults.

Having a child is often a defining life event when people start to seriously plan for the future.

Taking out life insurance can ensure that if the worst were to happen to you, your partner would receive the funds required to stay in the family home and support your child.

Alternatively, if you were a single parent or both you and your partner were to die simultaneously, your child would be provided for.

In instances where the parents are a couple, taking out a joint life insurance policy is an option.

Whilst this can save you approximately 25% compared with paying for two single policies, it will only offer one pay out.

This could mean that not enough cover is in place should you both pass away at the same time, affecting the financial stability of your children.

Therefore, before opting for a joint policy, it’s important to consider whether this will provide you with the level of cover required.

Contact us for your free quotes to compare joint vs single life insurance cover.

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Young adults without dependants

With regards to young adults without dependants, it can be more difficult to see the benefits of having life insurance.

However, something which is often overlooked is the cost of dying.

The average cost of a funeral has risen by 128% over the past 16 years and is unaffected by the age you are when you die.

This leaves the overall cost of dying at £9,263 and this figure is forecast to continue rising.

What many young adults overlook is that this expense is covered by your family if the estate isn’t sufficient to cover these costs.

To many families, this sum is significant and could cause a huge financial strain for your parents and/or siblings.

Having adequate protection in place ensures that these costs are covered, avoiding your loved ones from having to fund your funeral.

At what age should you get life insurance?

There is no definitive age which is best to arrange life insurance and this decision will be unique to you.

Whilst it's possible to arrange life insurance up to the age of 90, the cost will inevitably rise.

As a result, it's usually best to arrange life insurance as young as possible.

As discussed, term life insurance can last as long as 40 years, a significant period of your life span even if you're in your 20s or 30s.

To get your free quotes today, contact our award-winning team.

Is life insurance a good investment for young adults?

As discussed, invoking a special events option allows you to adjust your cover at a later stage to suit any change in circumstances.

As a result, it's ideal to take out life insurance in young adulthood as you can lock in low premiums for the foreseeable future.

Putting off arranging cover until you're older, will mean you're subject to increased premiums that come with age.

Therefore, arranging cover as a young adult can be a very good investment.

To obtain your free quote, contact our award-winning team.

First-time buyers

Whilst it isn’t a legal requirement to have life insurance when purchasing a property, it’s usually recommended.

Without life insurance, your death could mean that the house is repossessed or sold to cover any outstanding debt.

The average age of a first-time buyer in the UK is now 30[4].

Whilst there may be no dependants who rely on this as their home at the time of purchase, it’s a strong possibility in the future.

Or perhaps, if you’re paying a single person mortgage and living with a partner that doesn’t rely on you financially, but may have to leave the home if you pass away, then a life insurance pay out will ensure they can pay off the mortgage and remain in the home.

Taking out life insurance at the point of purchase means you’ll benefit from locking in low premiums due to your age.

Therefore, you can rest assured that if the worst were to happen, your mortgage would be covered.

Simply contact our team today for your free mortgage life insurance quotes.

Other outgoings you may not have considered

Debt in the UK is on the increase and is particularly prevalent amongst young adults.

Do you have any of the following?

  • Credit cards
  • Store cards
  • An overdraft
  • Rental agreement
  • Car finance
  • Any other form of payment plan

The remaining balance of each of these could be repayable upon your passing.

Whilst debts don’t become the individual responsibility of others, the outstanding balances will be recovered from your estate.

If you were to die with no assets, the balance of your debt is written off but there’ll be no legacy to leave behind for loved ones.

In some instances, payment plans or rental agreements are put in place with the use of a guarantor, (usually a parent).

If this is the case, your death could mean the responsibility of this outgoing becomes theirs.

The pay out from your life insurance could be used to cover the remaining balance of any debt in your name.

To ensure your loved ones, including parents, are protected, contact our team.

Life insurance for under 30s

For many under the age of 30, the main financial focus is keeping up with day-to-day outgoings.

As a result, you may be reluctant to take on another monthly outgoing.

However, taking out life insurance now could save you money in the long run.

For those under 30, life insurance premiums are significantly cheaper due to the reduced risk you pose.

As previously stated, ongoing changes (particularly to your health) will not cause your premiums to increase once your policy is live.

To secure life insurance if you're under 30, contact our team for cover from just 20p-a-day.

Life insurance for young smokers

Smoking inevitably inflates the cost of your premiums due to the increased likelihood of a claim being made.

However, with age, the additional amount you pay compared to a non-smoker also increases.

For example, a 30-year-old smoker will only pay a third more for their life insurance whereas a 50-year-old will pay 50% more[5].

Therefore, for smokers, it’s even more beneficial to take out life insurance as young as possible to make sure your premiums are affordable.

Writing your life insurance in trust, (avoid 40% inheritance tax)

When you pass away your life insurance proceeds form part of your estate.

If your estate exceeds £325,000 you’ll have to pay 40% inheritance tax (IHT) on the excess.

Whilst the £325,000 threshold may not seem relevant for many young adults, a policy of £200,000 coupled with a 1-bedroom flat worth £150,000 already exceeds this by £50,000 before any savings are factored in.

The good news is, by writing your life insurance in trust you can reduce the amount of IHT your loved ones would have to pay.

Writing your policy in trust detaches its value from your estate, meaning that it’ll not be taken into account with regards to the £325,000 threshold.

It’ll also mean that your loved ones won’t have to go through probate in order to gain access to a pay out, making the process faster.

Finally writing your life insurance policy in trust allows you to specify who you want the pay out to go to.

It’ll then be the responsibility of your trustee (similar to an executor of a will) to distribute the pay out accordingly.

Writing your policy in trust doesn’t have to be difficult.

At Reassured we're able to offer a dedicated free trust service on the majority of the policies we arrange, at no cost.

Writing your life insurance policy in trust in summary:

  • Reduce/ avoid 40% inheritance tax, (40% over £325,000)
  • Bypass the probate process, (for a faster pay out)
  • Specify how you wish the proceeds to be distributed

Compare life insurance quotes for young adults

Whilst it’s inevitably cheaper to take out life insurance when younger, quotes can vary significantly between different insurers.

To ensure you’re getting the most comprehensive cover at the lowest cost, it’s important to compare quotes.

Our award-winning, but completely free to you, quote service enables us to do the hard work for you.

We’ll compare a panel of insurers on your behalf, identifying the most competitive quotes.

Whether you’re in your 20s or 30s, why not seize the day, lock in the lowest premium and secure your long-term future.

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Sources:

[1] https://www.thebalance.com/why-you-need-life-insurance-in-your-20s-4153427

[2] SunLife (2021), Cost of Dying Report, sunlife.co.uk/costofdying2021

[3] https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/livebirths/bulletins/birthsbyparentscharacteristicsinenglandandwales/2015

[4] https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/firsttimebuyerhousingaffordabilityinenglandandwales/2017

[5] https://www.confused.com/life-insurance/guides/does-smoking-affect-my-life-insurance-premium

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