Young adults are in the most advantageous position when enrolling in life insurance. Young adults have the lowest premium rates of any age group. However, selecting a life insurance company can be challenging.
Here, we will look at the five best life insurance companies for young adults. These companies are our top performers because of product quality and services and the critical reception they've received.
Best life insurance for young adults in 2023: shortlist
- Everyday Life — best life insurance for young adults with fast and convenient enrollment
- Ladder — best term life insurance services for young adults
- Northwestern Mutual — best life insurance with a financial planning element for young adults
- State Farm — best life insurance for customer satisfaction for young adults
- MassMutual — best life insurance company with proven financial stability
Best life insurance policy for young adults: top companies
We looked at the top-performing life insurance companies. We organized them using criteria such as AM Best ratings, overall critical reception, the policies they offer, the add-ons policyholders can attach, the ease of acquiring a policy, and the overall value. Below, you will see companies that have made a name for themselves and maintained a positive reputation in the insurance world.
1. Everyday Life — best whole life insurance for young adults with expedient enrollment
Everyday Life is an insurance broker representing many life insurance providers. The enrollment process can take place entirely online, and within just a few clicks, you can get multiple quotes for the policy that interests you. Since enrollment is 24/7, a policy can be yours within 15 minutes at any time of day, be it the middle of the night or early afternoon.
The premiums are affordable, starting at $4.61, with an average monthly rate of roughly $15. Everyday Life is an excellent option for younger individuals looking for an easy and expedient way to secure their first life insurance policy.
Policies offered: Term Life, Whole Life, and Accidental Death
2. Ladder — best term life insurance services provider for young adults
Ladder strictly offers term life insurance but with a unique edge — the policies can be "laddered", or adjusted depending on the policyholder's needs at the time. Young adults can benefit because this also has low-cost coverage, and they can apply for $3 million in coverage without needing a medical exam, just some health questions are asked.
However, those willing to undergo a medical exam can get up to $8 million in coverage. Ladder works with many highly acclaimed and reputable insurance carriers to deliver quality coverage at an affordable price, with policies starting at roughly $5 per month.
Policies offered: Term Life
3. Northwestern Mutual — best life insurance with an investment component for young adults
Northwestern Mutual is among the most reputable life insurance companies. Northwestern Mutual is projected to have generated $6.8 billion in dividends for their life insurance policies with cash value. This company has attained the highest financial strength rating and is the nation's largest life insurance company.
Young adults may be interested in getting a policy from this company due to its reputation for long-term financial planning, and many of its life insurance policies (except Term Life insurance) feature a cash value component that grows as premiums are paid.
Policies offered: Term Life, Whole Life, Universal Life, and Variable Universal Life
4. State Farm — best customer satisfaction for young adults
State Farm is unmatched in terms of popularity and customer satisfaction. It is a highly acclaimed company ranking among the best, combining great customer service, various life insurance policies, and riders to customize policies further.
There are over 19,000 State Farm agents in the U.S. willing to help young adults find the best life insurance policy available. Policies are affordable, starting at just $15 per month.
Policies offered: Term Life, Whole Life (including Limited Pay and Single Premium), and Universal Life
5. MassMutual — best life insurance with reputable financial stability for young adults
MassMutual has been in the life insurance business for over 170 years and, in that time, has provided over $950 billion in life insurance protection. This company has consistently maintained a strong reputation as a top life insurer. MassMutual is worth considering for young adults who want life insurance from a company they can trust. This company issues policies suitable for any young adult wishing to enroll in life insurance.
Policies offered: Term Life, Whole Life, Universal Life, and Variable Universal Life
Best life insurance companies for young adults: top policies compared
This table provides a glance into each company. It highlights each deciding factor individuals may have when searching for life insurance, including overall reputation (as highlighted by the Better Business Bureau rating), selection of policy types, and whether enrollment can be completed online. Specific life insurance policies, such as final expense insurance, were omitted from available policy types due to being exclusive to seniors.
BBB ratings for Northwestern Mutual, State Farm, and MassMutual were based on those companies' headquarters. Each of these companies have offices throughout the U.S., and there are slight variances in BBB ratings between individual locations.
Here are our top five life insurance companies for young adults and how they compare to one another:
|Company||BBB rating||Policy types||Online application|
|Everyday Life||A+||Term Life, Whole Life, and Accidental Death||Yes|
|Northwestern Mutual||A-||Term Life, Whole Life, Universal Life, and Variable Universal Life||No|
|State Farm||B-||Term Life, Whole Life (including Limited Pay and Single Premium), and Universal Life||No|
|MassMutual||A||Term Life, Whole Life, Universal Life, and Variable Universal Life||No|
Ranking the top life insurance companies for young adults
We took a data-driven approach to rank these top life insurance companies for young adults, accounting for overall value, policies offered, financial strength, online reputation, number of complaints, and ease of application. These are life insurance companies with solid reputations that young adults can trust. Each company had to have an advantage over the others on the list, in addition to being one of the top life insurance companies on the market, to account for the diversity of priorities young adults have when deciding which life insurance company to choose.
Here are the criteria we used for ranking and the rationale for using them:
- Overall value. We focused on policies that would best fit the needs of young adults and policies that offered the most benefits for the lowest cost.
- Policies offered. We assessed the variety and quality of policies each company offered and how suitable those policies were for young adults. We also looked at riders and other add-ons that can help young adults find policies tailored to their specific needs and preferences.
- Financial strength. The insurance companies listed here have proven reliability when it comes time to disburse death benefits. We used the AM Best rating as the metric for financial strength.
- Online reputation. A company's online reputation is critical because it's another way to show a company is legitimate. Online reviews provide a window into overall customer satisfaction. We used Better Business Bureau ratings for these companies as a means of assessing reputational quality.
- Number of complaints. With these companies, the positive feedback far outweighed any negative reviews. The negative reviews were minimal, indicating that these companies are reliable, easy to work with, and excel in customer satisfaction.
- Ease of application. Enrolling in life insurance should have as few obstacles as possible. These companies provide a convenient, stress-free enrollment process to minimize the steps to secure a life insurance policy.
Why should young adults get life insurance?
In young adulthood, everything happens seemingly in the blink of an eye. It's a balancing act between pursuing an education, embarking on a new career, starting a family, and planning for the future. Life insurance can be an afterthought in light of so much going on, and it also means acknowledging that the worst-case scenario is possible at any moment. However, you must do what's best for your loved ones at any age.
Life insurance rates only go higher as time passes, and those who wait to get life insurance at a much older age may find that the policy they could have obtained for a low rate at a younger age is now significantly more expensive. Affordability aside, younger individuals should consider life insurance for the following reasons:
Life insurance allows you to expand your generosity. What you can transfer to your loved ones is no longer bound by the limits of your bank account. Life insurance allows you to pass wealth without saving beyond your earning capacity.
Peace of mind for you and your loved ones. You can rest easy knowing you will have single-handedly brightened your loved ones' financial futures. For an affordable monthly rate, you can pass funds that will be substantial enough to eliminate burdensome debts and help your loved ones remain financially stable (or attain financial stability) after you pass away.
Pass wealth without complications. Once it's time for the death benefit to be released, the transfer process will be simple and easy. Every beneficiary will get their designated amounts without undergoing a lengthy transfer period or losing some funds to income taxes.
Your loved ones will be grateful. This will undoubtedly create a lasting positive memory of you. This not only helps your loved ones, but it can also help those who rely on them, such as their spouses and children.
Guaranteed insurability. You can have virtually any life insurance policy you want. Once you're enrolled, you can keep your policy regardless of the health conditions you may develop later in life - conditions that would likely cause you to be denied coverage if you were to attempt to enroll in a new policy at that time. As you age, you'll be glad you enrolled in while you were young.
Choosing life insurance quotes and policies: things to consider
The best approach to selecting life insurance is to consider multiple factors: personal circumstances, the type of policy that best fits your needs and preferences, the amount of coverage, and the monthly rate of the policy you want to join. When considering these factors, you are much more likely to find a policy that you can be satisfied with.
People have different incentives to purchase life insurance. A newlywed who doesn't have children will likely want life insurance that will meet their spouse's financial needs if the policyholder were to pass away.
On the other hand, a married individual with children will typically choose life insurance coverage based on a different set of priorities, such as providing a death benefit to ensure their spouse and children can cover all costs of living and tuition expenses. Your circumstances will be one of the major deciding factors in what life insurance policy will be the best fit for you.
Type of policy
The type of life insurance policy you choose will dictate the benefits you can access and your requirements. A term life policy will give you the luxury of low-cost coverage for many years, but it will be up to you to renew the policy, or it will lapse, and you will have paid premiums for years in exchange for nothing in return. However, it's ideal if you prefer to have temporary life insurance.
If you choose whole life insurance, you benefit from a policy that lasts a lifetime and features a cash value component, which can later be used for personal expenses. On the other hand, it is more expensive than term life insurance due to its longevity and cash value growth.
The right coverage amount will depend on your policy's goals. If your objective is to pay what's left of your mortgage to spare your loved ones from worrying about paying it, you may choose a death benefit amount that matches the current outstanding balance. You could also select coverage that will help pay final expenses (e.g., funeral and burial costs), or you may decide on coverage that will help your dependents keep the standard of living you provided for them.
You can have an excellent policy that you're satisfied with, but it won't be useful if you cannot afford it. You've got to consider your budget because premium payments will keep your policy alive. Your policy can get canceled if you miss premium payments, which will cause you to lose the policy's benefits. If budget is of concern, you may choose a policy with a lower death benefit to have more affordable premiums.
Best life insurance types for young adults
The best life insurance types are divided into term and whole. Both accomplish the same objective (buy a policy so your loved ones will receive a death benefit after you pass away), but how they work will be slightly different. You need to decide what appeals more to you and your situation.
|Whole Life||Term Life|
|Length of coverage||Lifelong||5–30 years|
|Advantage||Cash value component provides an account with funds for personal use; no expiration||Inexpensive premiums; the policy can last long enough to meet policyholder's temporary coverage needs|
Term life insurance for young adults
Term life insurance policies provide coverage for a finite time. Term lengths can be anywhere from five to 30 years. Once the term ends, policyholders can choose between dropping or renewing the policy. If the policyholder drops the policy, they will no longer have a death benefit. If the policyholder renews, the coverage will continue, albeit for a higher monthly premium due to older age at the time of renewal.
Despite its affordable rates, the death benefit can surpass six figures — a potentially life-changing sum for any beneficiary. Many purchase this policy to cover an outstanding mortgage balance, but like other types of life insurance, the death benefit can be used to fulfill any purpose.
Whole life insurance for young adults
Whole life insurance costs more than term life insurance for two main reasons — its coverage remains in place as long as the policyholder is alive and paying premiums, and a portion of the premium payments go toward a cash value account, which grows tax-free. As the cash value builds, policyholders can access it as a source of funds during emergencies or large-scale purchases (such as buying a home).
Policyholders have control over how the cash value accrues. Cash value can be built with guaranteed interest for those who prefer a conservative approach. For those with a higher risk tolerance, the funds in the account can be invested in the stock market, allowing the policyholder to benefit from overall market growth.
Cost of life insurance for young adults
This is the expected monthly rate for young adults enrolling in $1 million in coverage for different types of term life insurance:
|10-year term||20-year term|
|Male, age 20||$35.50||$51.50|
|Female, age 20||$25.00||$35.00|
|Male, age 30||$40.00||$54.00|
|Female, age 30||$28.50||$43.00|
The above rates are based on averages. Your exact rate will depend on age, gender (women pay less than men due to longer life expectancy), lifestyle, and hobbies. Premium costs are higher for policies with more coverage, and the rates are always higher for those who enroll at an older age.
Benefits of getting life insurance when you're younger
Life insurance benefits all policyholders, but some are unique to specific age groups - young adults included. Young adults are in a prime position to capitalize on unattainable benefits for older age groups. At this stage in life, life insurance is at its absolute best value for the coverage provided. Here are some life insurance benefits that young adults can enjoy:
- Better rates. Without question, younger individuals always pay less compared to older policyholders. This is because premiums are largely decided by how long an individual is expected to live because more time equals more premium payments. Younger individuals can secure lower premiums since they will presumably be paying premiums for longer.
- More options. This is especially true for those wanting term life insurance, as younger individuals can enjoy lower rates and enroll in policies with term lengths that are unavailable to significantly older individuals. Also, since rates are more affordable, more policies are budget-friendly, even the ones with higher death benefits.
- More time to earn. More time for those enrolling in policies with a cash value component means more funds accruing tax-free. The cash value account becomes a better resource for covering emergency funds and other significant expenses.
- Guaranteed coverage later in life. The guaranteed benefits of getting life insurance at a young age makes early enrollment a real-world application of wisdom. You can keep your policy over the course of your lifetime, while also having the liberty of switching coverage types and adjusting death benefits without the stress of having to pass a medical exam. As long as you pay your premiums, you're guaranteed to stay insured and reap the benefits of your coverage - all thanks to starting your life insurance journey at a young age.
Is life insurance cheaper for young adults?
Yes, as individuals age, there is a linear increase in policy rates. Costs can rise exponentially the longer an individual waits to enroll in coverage.
For example, a 20-year-old female can expect to pay $25.00 per month for a 10-year term life policy with $1 million in coverage, but a 60-year-old female would pay $214.50 per month for the same coverage at the same term length. There is a stark difference between what young adults can expect to pay and what older adults are expected to pay monthly in premiums. This goes back to the role of life expectancy and premium costs. The longer a person is expected to live and pay premiums, the lower the rates.
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What is the best type of life insurance for young adults?
This depends on the goal - if the policyholder wants temporary coverage to meet needs specific to a 5 to 30-year period, term life is best. If the policyholder wants lifelong coverage with the added benefit of financial growth, whole life insurance is the better choice.
Is life insurance cheaper for young adults?
Life insurance is generally cheaper for young adults because premiums are priced according to life expectancy. Those with a shorter life expectancy have higher rates due to less time they'll be able to spend paying premiums. Young adults have lower rates because they are expected to live longer, and thus will have more time paying premiums.
Is life insurance worth it for young adults?
Yes, even if the young adult doesn't have a spouse or dependents. This is because life insurance can prevent relatives from incurring debts as a result of that person's death. Expenses like medical bills, outstanding balances on loans, and mortgages don't disappear when someone passes away. Life insurance ensures that your financial burdens won't become someone else's.
What is the cheapest age to buy life insurance?
The cheapest age is the age minimum for joining a policy. The exact minimum age for enrolling in a policy may vary by the insurance policy type and the company you purchase the policy from. However, lifestyle habits like smoking impact rates, too, and simply being younger doesn't always guarantee lower rates than older, healthier individuals.
Is life insurance worth it in your 20s?
Life insurance is a worthwhile purchase at any age, but it is especially worth buying in your 20s. You'll have low rates, plus more options to choose from. This is arguably the best time to join a life insurance policy.
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- J.D. Power. Both Life Insurance and Annuity Customer Satisfaction Decline as Pandemic Fears Wane, J.D. Power Finds.
- Ramsey Solutions. 2023 Average Term Life Insurance Rate Chart by Age.
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- Everyday Life. Our Plans.