Best Life Insurance For Young Adults

You are young, possibly single, do you really need life insurance?  Do you need to start planning for your financial future already?  If you are one of countless young Americans, the need for life insurance may not yet be there.  However if you are have a source of stable income and are planning on starting a family, a simple level term life insurance policy might be a good smart financial place to start.

Do all young adults need a Term Insurance Policy?  No, not all young adults need term or other forms of life insurance. Some do though, and determining which ones need it is the purpose of this article: Best Life Insurance Young Adults. In the end the Best Life Insurance policy is the one that fits the needs of the insured at the best available price with the most coverage for their dollar.

Often the Best Life Insurance policy is no life insurance policy.  Sometimes its a preferred plus 30 year term from an A rated carrier.  Other times its a smaller ten year term policy that is intended on being bulked up with an additional policy at a later time. Occasionally its a fully convertible term contract that will be changed over to a whole life policy when the insured has more disposable income.

Tempting as it may sound because of the slightly lower cost than others might pay, whole life insurance is not often needed by young adults.  What young adults do need from life insurance is inexpensive simple and affordable coverage.  None of which is available with a lifetime of higher whole life insurance premiums.

The Best Life Insurance for young adults is simply Term Insurance.  Term insurance is their best option. However exactly which term policy may be best for them, depends on their age and life stage.

Although its easy to imagine young adults as one homogeneous group, they are not.  Young adults can compromise everything from College Students to Parents with children.  In theory young adults involves anyone from about age 18 through age 29.  Basically adults under age thirty.  (These are our definitions at least.)  But the age that may say very little about where you are in your life:

As you can see when you start off with college students, include adults still living at home and end with new parents the term "young adult" means a lot of different things.  Therefore we have broken up these groups into their own sub headings which will allow everyone to learn about their potential life insurance needs.

What is the best life insurance for college students?  First off lets review if a college student even needs a life insurance policy?  In order to need life insurance typically you would have someone financially depending on you.  Therefore with most college students with no wife and no children, the simple answer is that you probably do not need a term policy.  At least yet.

Often a best life insurance option for college students is no life insurance at all.  Since college students typically do not have much income and no one depends on them, it usually makes no sense.

Once you score your first job, either out of college or high school, it may be time to start shopping for life insurance policies.  Since you are likely around 22 or so years old, the price for a term policy is often incredibly low.  Once you attain your first job, the need for life insurance may not be fully here yet, however you may have a need for it soon.  Ask yourself the following questions:  Do I plan on having a family, buying a home, or have children.  For those that can image this, often it does make sense to lock in a low rate on a thirty year term policy.

Congratulations on going to graduate school.  Now you have fully committed to your career of interest. Funds may be tight and for this reason life insurance may not be a priority.  Especially if you are using loans to pay for your education.  For this reason, you may do best to wait to graduating or until you buy a house, start a family, etc.

However if you are still able to purchase a term insurance policy at this stage in your life, be happy knowing that the rates should be quite reasonable.

A best term policy for a young adult that is a graduate student may be, based on affordability, a simple thirty year term policy based on ten times earnings (or projected earnings.)  This also may not be the case depending on their exact situation.

Moving into your full career means that its now time to fully take account of your personal financial situation.  If you put off buying a term policy till now, than its really time to get moving.  Your first chore is to visit your Human Resources department of your company and inquire as to the existence of any group life insurance that you may have.  Group life will rarely fully replace all of the life insurance that you will need, but it will help a bit.

Find out exactly how much you have and use to it bulk up what you need. Many financial planner suggest ten times earnings.  With younger career professionals since you are earlier in your career and lower on the pay side, this is often not enough.  It may make sense to consider 12 to 15 times earnings.

A best life insurance policy for an early career professional might be 12 times earnings in a thirty year contract.

For the aimless adult whose career and industry are not established, the decision to buy life insurance may seem moot. However, assuming you actually working, buying a simple term policy could be a smart move.  This does great depend on the situation of the individual.  Perhaps they are living at home in order to save money for further education or to care for a parent.

Life Insurance should not just be though of for people that have everything that they want and have their life perfectly put together.  Term insurance will be indispensable when you have a family or buy a house and the rates now, when you are very young are typically extremely inexpensive.

A smart life insurance option for an adult living at home who is working and saving their money may be to purchase a ten times earnings 30 year term policy.

If you have not already purchased term insurance yet, the time has certainly come.  New Parents absolutely need term insurance.  Actually couples that are considering having children are best to get it as soon as possible.  The good news, if you did wait till now, is that likely you are making real money and should be able to make your final choice on term coverage and still get an affordable amount. Hopefully.

The typical ten times earnings rule likely will apply to both you and your spouse.  Even if one of you plans on quitting your job to stay home with the kids.  Remember both parents needs life insurance, working or not.

Depending on how many children you are considering having, either a twenty five year or thirty year term may be best.  Aim to have coverage for your youngest child to get to and possibly through college.  In general though one your first child and twenty five year term can be best for new parents.

The best life insurer for young adults will be the one that offers the highest coverage, at the best AM Best rating, for longer length time periods.  At least that is my opinion.  So for many young adults here are the best independent options and why:

Are those all of the carriers?  Of course not, but they are some of the ones worth highlighting in an article about Best Life Insurance for Young Adults.  If you are interested in best whole life insurance for young adults, this article is not really intended for you.

Finding the best life insurance for young adults dramatically depends on your age and life stage. An young man that has recently graduated from college but who is un-working may need vastly different amount of insurance vs a new parent who is recently married.  A college student likely needs no life insurance vs a young adult who has just ramped up her careers and is now earning her first real salary. These stark differences demonstrate why young american may need vastly different amounts of term coverage.

The standard ten times earnings rule may not be as useful to this age cohort (18-30) because of the extremes of income and career.  That being said, when a young adult does have a job and anticipates starting a family, since they ten to be rather health, it can make sense to go ahead and purchase that 30 year $1,000,000 term policy as soon as they can.