As a young adult, you may not think you need life insurance, but it can be a valuable investment in your future. By buying a policy while you’re young and healthy, you can lock in an affordable rate and ensure that your loved ones are protected financially. With so many options available, it can be overwhelming to choose the right plan. In this article, we’ll guide you through the top life insurance plans for young adults in the United States, helping you make an informed decision that suits your needs and budget.
Best Life Insurance Companies for Young Adults in United States of America 2024 for June 2024
To find the best life insurance companies for young adults, we reviewed 90 life insurance companies and considered factors such as pricing, coverage options, and customer satisfaction ratings.
Protective: A Comprehensive Overview
June is the perfect time to start thinking about your financial future, and that includes investing in life insurance. Protective is our top pick for best life insurance company for young adults overall, offering excellent pricing for term life insurance policies, superior financial strength, and term lengths up to 40 years.
With Protective, you can get a quote and apply online for term life insurance, and get same-day coverage if you meet the underwriting requirements. While the company falls short in terms of overall customer satisfaction, its superior financial strength and comprehensive coverage options make it a great choice for young adults.
Banner by Legal & General: Features and Benefits
One of the key benefits of Banner by Legal & General is its affordability, with term life insurance premiums tied with Protective as the cheapest on our list. Additionally, Banner offers term lengths up to 40 years, a generous term conversion period, and the option to stack coverage with term riders.
States like California, Florida, and Texas have different regulations when it comes to life insurance, but Banner’s policies are designed to cater to the needs of young adults across the country. With Banner, you can get more than $10 million in coverage, and term policies are convertible until the end of the term (or until age 70).
Mutual of Omaha: Policy Options and Pricing
June is a great time to review your life insurance options, and Mutual of Omaha is an excellent choice for young adults who want to customize their coverage. The company offers a wide selection of riders and policy features, including less common ones, such as a disability income rider and a return-of-premium feature on some of its term policies.
Another benefit of Mutual of Omaha is its living benefits riders, which are included with many policies at no upfront cost. You can purchase term life, universal life, indexed universal life, or final expense whole life insurance, and some policies are available without a medical exam to eligible applicants.
Nationwide: Coverage and Riders
Comprehensive coverage is vital when it comes to life insurance, and Nationwide offers an impressive range of policy types, including term life, whole life, universal life, indexed universal life, and variable universal life. Most policies include three living benefits riders-for terminal illness, chronic illness, and critical illness-at no upfront cost.
Policy customization is key with Nationwide, and you can get a quote online to see how much you will pay. While the company’s pricing for term life insurance policies may not be the lowest, its excellent customer satisfaction ratings and wide selection of policy types make it a great choice for young adults.
Factors to Consider When Choosing a Life Insurance Plan
Some of the most important factors to consider when choosing a life insurance plan include:
- Age and Health Status
- Income and Occupation
- Family Size and Dependents
- Budget and Premium Payments
Knowing these factors will help you make an informed decision when selecting a life insurance plan that meets your unique needs and circumstances.
Age and Health Status
Healthy habits start early, and so should your life insurance planning. As a young adult, your age and health status can significantly impact your life insurance premiums and coverage options. Generally, the younger and healthier you are, the lower your premiums will be.
Income and Occupation
Factors such as your income and occupation can affect your life insurance needs and budget. For instance, if you have a high-risk job or earn a high income, you may need more coverage to protect your loved ones in case of an unexpected event.
For instance, if you’re a freelancer or entrepreneur, you may need to consider additional coverage to protect your business interests. On the other hand, if you have a stable job with a steady income, you may be able to opt for a more affordable policy.
Family Size and Dependents
Life is full of surprises, and having a family can bring new responsibilities and financial obligations. When choosing a life insurance plan, consider the size of your family and the number of dependents you need to protect.
A growing family means increased financial responsibilities, and having adequate life insurance coverage can provide peace of mind and financial security for your loved ones.
Budget and Premium Payments
Your occupation can also impact your budget and premium payments. For example, if you work in a high-stress job or have a variable income, you may need to adjust your premium payments accordingly.
Insurance companies offer various premium payment options, such as monthly, quarterly, or annual payments. Consider your budget and financial situation when selecting a premium payment plan that works best for you.
Types of Life Insurance Policies
Many young adults may not know that there are various types of life insurance policies to choose from, each with its unique features and benefits. Understanding the different types of life insurance policies can help you make an informed decision when selecting a policy that suits your needs.
- Term Life Insurance
- Whole Life Insurance
- Universal Life Insurance
- Variable Life Insurance
| Type of Policy | Description |
|---|---|
| Term Life Insurance | Temporary coverage for a specified period (e.g., 10, 20, or 30 years) |
| Whole Life Insurance | Permanent coverage with a cash value component |
| Universal Life Insurance | Flexible premiums and adjustable coverage |
| Variable Life Insurance | Combines a death benefit with an investment component |
The type of policy you choose will depend on your individual circumstances, financial goals, and preferences. Let’s take a closer look at each type of policy.
The information below provides a brief overview of each type of policy, helping you to make an informed decision when selecting a policy that suits your needs.
Term Life Insurance: Temporary Coverage
To provide temporary coverage for a specified period, term life insurance is an affordable option. This type of policy offers coverage for a specific term, such as 10, 20, or 30 years, and pays a death benefit if you pass away during that term.
Term life insurance is ideal for young adults who want to ensure their loved ones are financially protected until their children are grown and self-sufficient or until their mortgage is paid off.
Whole Life Insurance: Permanent Coverage
One of the most common types of life insurance, whole life insurance provides permanent coverage for your entire lifetime, as long as premiums are paid. This type of policy also builds cash value over time, which you can borrow against or withdraw.
Whole life insurance is suitable for young adults who want to ensure their loved ones are financially protected for the long term, regardless of when they pass away.
Temporary whole life insurance policies can provide a guaranteed death benefit and a cash value component, which can grow over time. You can use the cash value to supplement your retirement income or pay for unexpected expenses.
Universal Life Insurance: Flexible Premiums
Permanent life insurance with flexible premiums, universal life insurance allows you to adjust your coverage and premiums to suit your changing needs.
Universal life insurance is ideal for young adults who want flexibility in their life insurance policy, allowing them to adjust their coverage and premiums as their financial situation changes.
Coverage under universal life insurance can be adjusted to suit your changing needs, and you can also skip premium payments or reduce your coverage if needed. Additionally, you can invest your cash value in various investments, such as mutual funds or stocks.
Variable Life Insurance: Investment Component
Coverage that combines a death benefit with an investment component, variable life insurance allows you to invest your cash value in various investments, such as mutual funds or stocks.
Coverage under variable life insurance can provide a death benefit and an investment component, allowing you to grow your cash value over time.
Flexible variable life insurance policies can provide a range of investment options, allowing you to grow your cash value over time. You can use the cash value to supplement your retirement income or pay for unexpected expenses.
Benefits of Life Insurance for Young Adults
Once again, life insurance is often overlooked by young adults, but it can provide numerous benefits that can have a significant impact on your life and the lives of your loved ones.
Having a life insurance policy can bring peace of mind, knowing that your family will be financially protected in the event of your passing. Here are some of the key benefits of life insurance for young adults:
Financial Security for Loved Ones
One of the primary reasons to consider life insurance is to ensure that your loved ones are financially secure in the event of your passing. A life insurance policy can provide a lump sum payment to your beneficiaries, which can be used to cover funeral expenses, pay off debts, and maintain their standard of living.
Funeral Expenses and Final Costs
Young adults often underestimate the cost of funeral expenses and final costs, which can be significant. A life insurance policy can help cover these expenses, ensuring that your loved ones are not burdened with additional financial stress during a difficult time.
Adults, on average, can expect to pay around $7,000 to $10,000 for funeral expenses, which can be a significant burden on your family. Having a life insurance policy can help alleviate this financial stress, allowing your loved ones to focus on grieving and celebrating your life.
Income Replacement and Debt Repayment
Young adults often have significant financial obligations, such as student loans, credit card debt, and mortgages. A life insurance policy can provide income replacement and debt repayment, ensuring that your loved ones are not left with these financial burdens.
With a life insurance policy, your beneficiaries can use the payout to pay off outstanding debts, maintain their standard of living, and continue to achieve their financial goals. This can provide a sense of security and stability during a difficult time.
Business Protection and Key Person Insurance
An important consideration for young adults who are entrepreneurs or business owners is business protection and key person insurance. A life insurance policy can provide financial protection for your business in the event of your passing, ensuring that your business partners, employees, and customers are protected.
Protection is necessary for businesses, especially those with multiple owners or key employees. A life insurance policy can provide a payout to the business, allowing it to continue operating and maintaining its financial obligations. This can be especially important for businesses with significant financial investments or loans.
How to Compare Life Insurance Quotes
Your search for the perfect life insurance policy begins with comparing quotes from different providers. But with so many options available, it can be overwhelming to navigate the process. Here’s a step-by-step guide to help you compare life insurance quotes effectively:
Comparison Factors
| Factor | Description |
|---|---|
| Premium Cost | The monthly or annual cost of the policy |
| Coverage Amount | The amount of money paid to beneficiaries in the event of your death |
| Term Length | The duration of the policy, ranging from 10 to 40 years |
| Policy Type | The type of policy, such as term life, whole life, or universal life |
| Riders and Add-ons | Additional features or benefits that can be added to the policy |
| Premium Payment Options | The frequency and method of premium payments |
| Insurance Company Ratings | The financial strength and customer satisfaction ratings of the insurance company |
Online Quote Comparison Tools
Quotes from multiple insurance companies can be easily compared using online quote comparison tools. These tools allow you to enter your information once and receive quotes from various providers, making it easier to compare prices and features.
Online Quote Comparison Tools
| Tool | Description |
|---|---|
| Policygenius | A platform that compares quotes from over 20 insurance companies |
| NerdWallet’s Life Insurance Comparison Tool | A tool that compares quotes from top insurance companies |
| InsureNOW | A platform that provides instant quotes from multiple insurance companies |
Insurance Agents and Brokers
Online quote comparison tools are convenient, but they may not provide personalized guidance. Insurance agents and brokers can offer expert advice and help you find the best policy for your needs.
To get the most out of working with an agent or broker, be prepared to discuss your financial situation, health, and coverage goals. They can help you navigate the application process and provide valuable insights into the insurance companies and policies they represent.
Policy Riders and Add-ons
Compare the riders and add-ons offered by each insurance company. These additional features can enhance your policy, but they may also increase the premium cost.
With riders and add-ons, you can customize your policy to fit your specific needs. For example, a waiver of premium rider can waive your premium payments if you become disabled, while a long-term care rider can provide funds for long-term care expenses.
Premium Payment Options and Discounts
Life insurance premiums can be paid monthly, quarterly, or annually, depending on the insurance company. Compare the premium payment options and discounts offered by each provider.
A life insurance policy with flexible premium payment options can help you manage your finances more effectively. Additionally, look for discounts, such as multi-policy discounts or good student discounts, that can reduce your premium cost.
Common Mistakes to Avoid When Buying Life Insurance
Despite the importance of life insurance, many young adults make mistakes when purchasing a policy. These mistakes can lead to inadequate coverage, unexpected costs, or even policy cancellation. To ensure you get the right coverage for your needs, avoid these common mistakes.
Insufficient Coverage
On average, young adults underestimate their life insurance needs, leaving their loved ones with insufficient coverage in the event of their passing. Make sure to calculate your coverage needs accurately, considering factors such as funeral expenses, outstanding debts, and ongoing financial obligations.
Inadequate Policy Term
Coverage that expires too soon can leave your loved ones vulnerable. Choose a policy term that aligns with your financial obligations, such as the length of your mortgage or until your children are grown and self-sufficient.
Insufficient policy terms can lead to a lapse in coverage, leaving your loved ones unprotected. Consider a policy with a longer term or one that allows you to convert to permanent coverage.
Failure to Disclose Medical History
To ensure accurate premiums and avoid policy cancellation, it’s imperative to disclose your medical history accurately. Failure to do so can result in denied claims or policy termination.
History of medical conditions or health issues can impact your premiums and coverage. Be honest about your medical history to ensure you get the right coverage for your needs.
Not Reviewing Policy Exclusions
Failure to review policy exclusions can result in unexpected surprises when you need to make a claim. Understand what is excluded from your policy to avoid disappointment.
Avoid assuming that your policy covers everything. Take the time to review policy exclusions and limitations to ensure you understand what is covered and what is not.
To wrap up
Upon reflecting on the top life insurance plans for young adults in the United States, you now have a clear understanding of the best options available to you. Whether you’re looking for affordability, customization, or living benefits, companies like Protective, Banner by Legal & General, Mutual of Omaha, and Nationwide offer superior products tailored to your needs. By investing in life insurance early, you’ll not only secure your financial future but also provide peace of mind for yourself and your loved ones. Take the next step and explore these top-rated providers to find the perfect policy for your unique situation.