Life insurance in your 20s

For Life Insurance Awareness Month, we’re illustrating the need for life insurance across different life stages. If you’re in your 20s, here’s why the time for life insurance could be now.

Why you might need life insurance in your 20s

Your 20s can be a momentous decade. Here are some major life events you may experience between the ages of 20-30, creating a potential need for life insurance:

You graduated from college

Graduating from college is a milestone that often comes with a hefty price tag in the form of student loans. Life insurance can protect you from passing on your student loan debt to your loved ones if you pass away.

You bought a house

Buying your first home is likely the most significant financial undertaking of your life. In the event of your untimely death, life insurance can help pay off the outstanding balance of your mortgage.

You got married

If your significant other depends on your income, life insurance can protect them from being in a precarious financial situation should anything happen to you.

Do you always need life insurance in your 20s?

Why you might not need life insurance in your 20s

It’s important to note that, in some cases, life insurance might not be an immediate need for 20-30 year olds. If you are single with no dependents, and no significant debts like student loans or a mortgage, you can likely hold off on purchasing life insurance.

However, even if you don’t need it quite yet, purchasing life insurance should be on your radar once you begin to take on some significant expenses and responsibilities.

The case for life insurance in your 20s

The biggest benefit to purchasing life insurance in your 20’s is that the earlier in your life that you get it, the more affordable it will be. Each year that you delay buying a life insurance policy, the cost of premiums increase by an average of 8-12%. If you’re in good health—your rate will be even better. The longer you put it off, the more risk there is of developing health issues that can make life insurance more expensive or even unattainable.

A common mistake made by millennials is overestimating the cost of life insurance (more on that below). In reality, a 25 year old non-smoker in good health can get a 10-year term policy with a death benefit of $1,000,000 for as little as $58 per month (with some Ethos term products). That’s less than many gym memberships.

Common misconceptions around life insurance

There is some disconnect between perception and reality around life insurance and how it fits in an individual's overall financial picture. Here are some stats that illustrate common misconceptions young people (and others) may have about life insurance:

44% of Millennials overestimate the cost of life insurance by five times the actual amount. (2018 LIMRA Insurance Barometer Study)
33% of Americans think life insurance is unaffordable. An additional 24% think it's hard to get. (2020 Ethos Financial Legacy Index)
64% of Americans are unaware that private student loan debt isn’t always forgiven when you die. (2020 Ethos Financial Legacy Index)

The takeaway here is that Ethos offers affordable, accessible life insurance that can be applied for in a matter of minutes. In the unexpected event of your death, it can protect your loved ones from the burden of your financial obligations—like private student loan debt.

The bottom line on life insurance in your 20s

While life insurance may not be on your radar in your 20’s—it’s an ideal time to start thinking about it. The benefits of purchasing life insurance early in your life and locking in the best rate for yourself far outweigh the financial obligations.

Please note that all prices quoted are subject to change, including due to underwriting.

Life insurance in your 20s

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