From landing your first real job to living in your own apartment to balancing your own budget, adulting can be hard. It’s easy to get caught up trying to navigate life and stay afloat as a young adult. You have new expenses and places to put your money: Think 401k or Roth IRA contributions, health insurance premiums, and student loan payments. 

Adding additional expenses, like life insurance, may seem like an unnecessary expense when you’re in your 20s or 30s, but you never know what life may throw at you. Believe it or not, having a term life insurance plan in place as a young adult may be one of the smartest things you do for yourself in this decade of your life.

Maybe you’ve been considering a life insurance plan already, or perhaps it’s never even crossed your mind. Purchasing a term life insurance plan now can be worth it: Here’s why.

First, what is term life insurance?

Like any other insurance policy, with term life insurance, individuals pay a monthly or annual premium in exchange for coverage. In this situation, the insurance company will pay a lump sum upon death to the beneficiary (or beneficiaries). Term life insurance policies last for a specific period of time; individuals can pay month-to-month or lock into a term of 20 or 30 years, for example. If they outlive the policy, they can take out another

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No one is immortal, and the unexpected can happen at any time. But this isn’t one of the primary reasons to consider life insurance as a young adult. In fact, millennials are arguably the most healthy and active demographic and will likely live long, wonderful lives. So why consider life insurance? Here’s a few reasons why it makes financial sense now.


1. Having good health can mean lower premiums.

Life insurance rates are predicted by how risky someone is to insure. Generally speaking, the healthier, younger, and fitter you are, the better life insurance premium you’ll get.

“Qualifying for [life insurance] coverage requires relatively good health to obtain coverage at a reasonable rate,” says Tom Linkous, owner and agent at Linkous Financial and Insurance Services. “Having coverage when you’re younger when health is at its best can avoid having to qualify at a later date when your health may have declined.”

Getting a term life insurance policy when you’re young and healthy will save you money in the future because you can lock into a great rate based on your health today and keep that rate for the term of your policy, potentially 30 years.