It’s Never Too Early to Get Life Insurance

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After posting our blog in February - It's Never Too Late to Get Life Insurance - we thought we'd look at getting life cover at a younger age and the benefits that being young and healthy can have on your premiums!

What is the best age to get life insurance?

The idea that you’d step out of education and immediately think about buying life insurance is crazy to many – after all, isn’t this the age where you should be carefree and wild? Travelling the world and experiencing everything life has to offer? True – it is, but does that mean you have to miss out on the deal of the century?

By the time you have started a family, considered a mortgage and started to look at those days of single-freedom as the distant past, life insurance will be just another one of those things that form part of the personal finance package you are building.

While the cost of decent cover in your thirties and early forties is nothing but reasonable, there is a staggering level of cut-price premiums that are offered to those in their early twenties or even late teens!

Should you get life insurance in your 20s?

It’s all about risk. The cost of a premium is based on the level of risk the insurance company is undergoing in giving you cover. And when you are 20 years old, even if you are looking at spending a year travelling the far east, your risk level is low. You are healthy, young, vibrant – the perfect image of risk-free life cover.

A policy taken out in your early 20s can be as low as £5 per month for over £100,000 in cover. Five pounds – it’s barely more than a decent cup of coffee, and while it’s not something we may want to talk about, it provides more than enough cover to give your beneficiaries the ability to cover any costs, such as your funeral and more.

A little maths – is life insurance worth it?

The best way to get a good deal as a young person is to look at a level term policy. The smart move is to stretch that to your retirement – from 45 or so years of term cover. While the numbers do change depending on your personal circumstances and situation (and we have seen quotes as low as £5), the average cost for life insurance in your early 20s can be approximately £7.50 for a payout as much as £200,000.

How much is that going to cost you over 45 years? Well, 12 x £7.50 = £90, so that’s a year cost – and £90 per year for 45 years is substantially less that £200,000. In fact, it’s £4050, Four thousand pounds paid out over the life of the quote, and a potential £200,000 paid out should the worst happen!

There are no tricks here – the insurance company is gambling that you’ll make it to a ripe old age and the term will end before you die. To be honest, we all hope that’s the case, but if the worst should happen, you are looking at a fantastic level of cover for minimal investment.

Who will get my life insurance? What are the benefits of getting cover at a young age with no family to support?

It’s true, the chances are high that any life insurance payout for a young single person in their early 20s is going to go to parents – not that that is a bad thing, but the typical arguments regarding dependants becomes invalid.

The thing is, what about when life changes? What if you do get a partner who relies on you financially, or you have a child? For many, this is when they start thinking about life insurance, but for anyone who saw the sense to buy life insurance at an early age, there’s an impressive level of cover already in place at a price so affordable it’s practically irrelevant.

Life insurance is about future planning, so why not see it like that and take future planning to the limit?

Can you get life insurance at 18? At what age should you get life insurance?

Eighteen is the earliest you are considered to have the responsibility to enter into long-term financial arrangements in the UK, and so represents the youngest age possible to take out an independent life insurance policy.

It also represents the age where you are likely to be at your healthiest. If you are a non-smoker, reasonably fit young person with no significant medical conditions then it is the time when you will be able to secure the best value life insurance deal and it is therefore the perfect time to get life insurance.

Why does getting life insurance when young provide the best life insurance deals?

The cost of your life insurance premiums is calculated based on the risk factors you present when you make your application. It is administratively difficult (as well as quite unfair for you) for a life insurance company to adjust your premiums later on in life, and so they are set from the time of application and remain unchanged throughout the term of your policy.

In short, this means if you start off paying £5 per month for your life insurance, that’s the price it will always be.

Taking out long-term life insurance policies when you’re young means that you lock the low prices in place and get the advantage of the good deal no matter how your life changes in the meantime. If you take up smoking, become overweight, or any other factors happen that would typically make a future policy expensive, it doesn’t have any effect on your set premiums.

Obtaining life insurance as soon as you can will mean you get the best deal possible for you – the best time to get life insurance is always as soon as you think of it!

Can I change the beneficiaries on my life insurance at a later date, if I get married or have children, for example?

There are different types of policies available, including those with a set beneficiary, policies to be paid to trust and others where the money forms part of your overall estate. Depending on these factors, you may be able to alter who will receive your life insurance policy at a later date.

In addition, you are entitled to make some changes to your life insurance policies when you have a major ‘life event’ as part of the terms of most policies – moments like marriage and childbirth count as ‘life events’ and would be moments when you can adjust your policy with no penalty. For more information regarding life events, discuss this when you make your application.

How do I get life insurance?

Give us a call at Quick Quote Protect or fill out our short contact form to have someone call you back at a convenient time. Our advisors will be happy to discuss the various types of life insurance policies with you and help you get the right level of cover to suit you.