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Best life insurance companies for young adults

The best life insurance companies for young adults not only provide great premium rates, they make it easy to apply for a term life insurance policy online, are financially stable, and are transparent about who they will cover and who they may disqualify. 

We think the best term life insurance company for getting fast, easy life insurance coverage right now is Ladder Life Insurance. Get flexible coverage in minutes that’s affordable with prices at $5/mo. There’s term coverage between $100k – $8M with a 100% digital option when you apply for coverage of $3M or less.

Overview: Best life insurance companies for young adults

Ladder

Your life insurance needs will change over time; that’s what we love about Ladder. Ladder makes it easy to increase or decrease your coverage amount. Although that might not seem like a big deal, the reality is most life insurance companies lock you in to a coverage amount for 20 or 30 years. The flexible, changeable policies may it our top overall pick.

Ladder Life Insurance

Ladder offers addorbable term lengths between 10 and 30 years with a coverage minimum of $100,000 and a maximum of $8 million. The company is unique in that it gives you the option to “ladder” your coverage, which allows you to adjust your death benefit as your family’s financial needs evolve.

Pros:
  • Affordable term life coverage
  • Easy application
  • Option to “ladder” your coverage
Cons:
  • Only sells term life policies
  • No riders available
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Ladder Insurance Services, LLC (CA license # 0K22568; AR license # 3000140372) offers term life insurance policies: (i) in California, on behalf of its affiliate, Ladder Life Insurance Company, Menlo Park, CA (policy form # P-LL100CA); (ii) in New York, on behalf of Allianz Life Insurance Company of New York, New York, NY (policy form # MN-26); and (iii) Fidelity Security Life Insurance Company®, Kansas City, MO (policy form # ICC17-M-1069, M-1069 and policy # TL-146) in the District of Columbia and all states except New York and California. Only Allianz Life Insurance Company of New York is authorized to issue life insurance in the state of New York. Insurance policy prices, coverages, features, terms, benefits, exclusions, limitations and available discounts vary among these insurers and are subject to qualifications. Each insurer is solely responsible for any claims and has financial responsibility for its own products.

While you might not have $500,000 or $1 million in investments today, regular investing over a decade or two could get you there. If you have a 30-year term life policy, that may mean you could be over-insured in the future. Ladder allows you to adjust your coverage levels at any time without processing fees and with ease. The same is true if you need to decrease coverage.

Ladder’s policies are issued through highly rated insurers that have long histories of paying claims and supporting families.

» MORE: Get a life insurance quote with Ladder or read our Ladder review

Bestow

For online term life insurance companies, Bestow ranks among the best. You don’t need a medical exam or bloodwork to process your online application, and Bestow offers term life insurance policies in 10, 15, 20, 25, or 30-year terms.

Purchasing life insurance coverage with many insurers can be an arduous process involving lots of phone calls an in-home medical exam. But Bestow does everything online, and you can get instant life insurance coverage if you qualify. Life insurance policies ranges from $50,000 to $1.5 million. Bestow is available across the United States except for New York.

The downside to using Bestow is that you’re limited in your ability to customize your policy with specific riders. If you work in a dangerous occupation, have certain health conditions, or engage in dangerous hobbies, you may want to look elsewhere.

» MORE: Get a life insurance quote with Bestow or read our Bestow review

Fabric by Gerber Life

Fabric by Gerber Life Logo

If you’re getting life insurance because you want to plan for your family’s future, Fabric by Gerber Life might be the best option for you. This direct-to-consumer insurance agency provides term life policies as well as tools for managing your family’s finances.

In addition to affordable and customizable policies, Fabric by Gerber Life offers an app that can help you with everything from creating a will to organizing your spending and savings account in one place. For convenient collaboration, insurance policies are easily sharable with your partner or co-parent through the app or platform.

Coverage amounts for term life insurance range from $100,000 to $5 million and term lengths are available for between 10 and 30 years. Policies start at just $7.86 a month.

You can fill out an application in just 10 minutes to receive your personalized recommendations and get started.

» MORE: Get a life insurance quote with Fabric by Gerber Life or read our Fabric by Gerber Life review

The competition

There are a lot more life insurance companies out there than you might expect, and we didn’t include them all in this round-up. For one, we only focused on term life insurance companies that allow you to apply and get a policy online, with or without a medical exam. Still, in that category, there are some companies that didn’t make our cut but you may also want to consider as a young adult.

Northwestern Mutual

Northwestern Mutual is the nation’s largest life insurance provider, offering both term and permanent life insurance policies. Northwestern Mutual has excellent financial strength and a low rate of consumer complaints. They are, however, known for employing extremely aggressive insurance agents (e.g. salespeople) that talk people into more expensive permanent life insurance policies, even if they don’t need it.

State Farm

State Farm is an immediately-recognizable insurance brand. In addition to auto and home insurance, you can get a term or permanent life insurance policy from State Farm. State Farm has exceptional financial strength, but buying life insurance must be done through a local agent which subjects young adults to sales pitches that may try to get you to buy more insurance than you need.

USAA

USAA sells permanent and term life insurance policies to both members of the military and civilians, but many policies cater to service-members. If you are in the military, USAA should be on your list, as many other insurers won’t cover members of the military.

Lincoln Financial

Lincoln Financial is a large provider of life insurance and annuities, often sold through independent agents. Due to a lack of online quoting and purchase options, we don’t recommend them as a top option for young adults.

Haven Life

Haven Life was a leading life insurance provider that was great for young adults. Applications were 100% digital with choices between policies that included exams and no-exam policies. The prices were fairly low as well. In late 2023, Haven Life announced they were no longer accepting new applications. Existing policies would be continued to be administered and serviced by MassMutual.

How we picked

When choosing a life insurance company, there are over a dozen factors we looked at, including:

  • Financial strength
  • Policy choices
  • Cost
  • Approval rates and disqualifying conditions
  • Customer complaints
  • Ease of application

For our list of best life insurance coverage for young adults, we also specifically focused on companies that specialize in providing term life insurance coverage and that allow you to apply for and buy your policy online — with or without a medical exam.

We didn’t focus on permanent life insurance (which includes whole and universal life insurance) because it’s a much more costly option that, in our opinion, isn’t right for most young adults. Permanent life policies are much more profitable for insurance companies, and insurers that offer both whole and permanent life will often try to sell the more expensive, more profitable coverage even when it’s not the best fit for you. That’s why our picks allow you to quote and buy policies online so you can feel confident you’re buying the best policy — at the best price.

What is life insurance?

So what exactly is life insurance? It may be a bit confusing because there are so many different types. However, life insurance is pretty simple in its most basic form.

A life insurance company offers you a life insurance policy. The policy allows you to pay the life insurance company premiums in exchange for a guarantee that if you die during the policy period, they’ll pay out the amount of life insurance you purchased to the beneficiary of the policy.

Unfortunately, life insurance has gotten complicated because there are so many variations on the basic policy. The two most common types are term life insurance and whole life insurance.

Term life insurance

Term life insurance allows you to purchase life insurance for a set term of time, such as 10, 20 or 30 years. You make premium payments during the period and if you die during the period, the life insurance company will make a payment to the beneficiary. However, if you don’t die before the end of the term, the policy expires and you get nothing.

While this may seem like a ripoff, it’s worth considering because term life insurance rates are typically cheaper than other options. The life insurance company is betting that, overall, they’ll pay out less in death benefits than the premiums they collect, allowing them to make a profit. It also protects your family in the unfortunate circumstance you die early.

However, during the policy term, we think you should also be saving and investing for your future. By the time the policy expires, you may have enough assets to no longer need life insurance.

But how much does term life insurance cost? See the following premium examples Haven Life shared previously on their blog.

Based on the above data, you may see some distinct pricing trends. One of those pricing trends is that life insurance typically gets more expensive the longer your policy term is. When you think about it, this makes perfect sense.

The longer a life insurance company insures you, the older you’ll be at the end of the policy. In general, the older you get the higher the risk is that you’ll die. If you die during the time when the life insurance policy is active, the company will have to pay out the death benefit.

However, you should also consider the fact that your insurance will be in effect for a longer period of time. Rather than only covering you for 10 years, a 30-year policy offers three times the length of insurance.

While you shouldn’t purchase a longer policy for no reason, if you actually believe you’ll need the insurance for the full 30-year term it’s probably a good idea to get the 30-year policy now. As you get older, life insurance rates usually increase.

If you bought a 20-year policy today then need to purchase an additional 10-year policy when it expires, your rates may be higher to buy an additional 10-year policy in the future than it would have been to pay for a 30-year policy today. This is especially true if your health declines over the next 20 years.

Whole life Insurance

A whole life insurance policy, on the other hand, is a form of permanent life insurance that will last your whole life as long as you keep making premium payments and follow the rules of the policy. Since it lasts your entire life, the insurance company is guaranteed to pay out when you die as long as the policy remains active.

Whole life policies, like all permanent life insurance, policies have a cash value component that increases the value of this type of policy. This means whole life insurance rates will generally be more expensive than term life rates.

Be sure to weigh all the pros and cons of both term and whole life insurance with your financial advisor to make sure you are making the best decision for your circumstances. As a rule, however, we always maintain that term life insurance is the best life insurance for young adults and, almost always, the only kind of life insurance you need.

You may be wondering exactly how much whole life insurance costs. Unfortunately, whole life insurance is much more complex than term life insurance. There are many different types of policies and riders you can purchase that will impact the rates you pay. That said, here are some of the pricing examples we found from TopWholeLife.com.

As you can see, whole life insurance is much more expensive than a term life insurance policy. That said, a whole life policy will be in effect until the day you die unless you quit paying your premiums or cancel the policy.

Tip

Universal life insurance is another kind of life insurance that we are intentionally not going to cover here because most young adults won't benefit. It's a complicated product that can provide some valuable benefits for policyholders who have a lot of assets (think: millions of dollars in investments or business interests).

Why young adults need life insurance coverage

If you have a spouse, children, or anybody else who depends on your income, you need life insurance.

Typically, people buy life insurance to protect their families, loved ones, or businesses should they die a premature death.

It provides assets so people or businesses can continue to function, recover, and live a normal life without the income or knowledge the insured person usually provides.

What does life insurance cover?

Life insurance offers a payout based on the amount of coverage you selected when you took out your policy if the insured person dies and followed the restrictions of the policy.

If you die of natural causes, a car accident, or in another way that wasn’t excluded and happens in the normal course of life, your policy should pay out the death benefit to your beneficiary.

What doesn’t life insurance cover?

Life insurance won’t cover all deaths. Certain deaths are excluded based on the restrictions listed in the policy. Common exclusions include death by suicide in the first two years of the policy, murder by the person that stands to benefit from the policy payout, and death caused by willing participation in criminal activity.

There are also exclusions listed in your policy such as sky diving, flying small planes, or other dangerous activities. There may be other exclusions, as well, so make sure to read your policy in full before you purchase it.

A life insurance company may deny your death benefit if you lied on your insurance application. For instance, if you lied about your health or smoking habits to get a lower rate and the insurance company finds out about it, they can refuse to pay out your death benefit based on the rules in the policy.

It’s important to keep in mind that traditional life insurance coverage only covers death. If you get seriously injured, it won’t cover you. It won’t cover your lost income if you can’t return to work, either.

What to look for in a life insurance policy

It helps to know what to look for when shopping for a life insurance policy. First, you’ll want to determine what type of policy you want to buy. After you figure that out, you should consider how long you’ll need life insurance for (the term) and how much money your beneficiary would need should you die (the benefit or coverage amount).

Next, shop multiple insurers to find a policy that meets your needs. Take a look at the premium, or cost, of the policy as well as the financial strength and customer service ratings of the companies you’re considering buying from. Read and understand the policy before you purchase to make sure you’re getting what you think you are.

How life insurance premiums are determined

Life insurance rates are determined by a vast number of factors, but essentially insurers are pricing policies based on the chances that you’ll die. They may look into factors including:

  • Height
  • Weight
  • Age
  • Gender
  • Your current health
  • Your health history
  • Your family’s health history
  • Whether you smoke
  • What activities you take part in
  • Occupation
  • Term of coverage
  • Amount of coverage
  • Lifestyle
  • Driving record
  • Alcohol consumption
  • And more

Insurance companies don’t always get their premiums priced correctly. After all, people die prematurely in ways that are completely unpredictable based on the above factors.

Even so, life insurance companies spread the risk that they’re wrong out over a large number of policies they issue so that overall, they’ll end up earning a profit and can pay out death benefits to those that are entitled to them.

How much life insurance do you need?

Life insurance serves as a financial safety net, ensuring that your loved ones remain financially secure should the worst happen. The amount of life insurance you need varies based on individual circumstances, but here are some key considerations to guide your decision:

1. Final expenses: At the very least, your life insurance should cover funeral and burial costs, which can range from $7,000 to $12,000 or more, depending on the services chosen.

2. Debts: If you have any outstanding debts, such as a mortgage, car loans, credit card balances, or personal loans, it’s advisable to have enough coverage to settle these debts, ensuring your loved ones aren’t burdened with them.

3. Income replacement: Consider how many years of your salary your family would need if you were no longer around. A common recommendation is coverage that equals 5 to 10 times your annual income. For instance, if you earn $50,000 annually, you might aim for a policy between $250,000 and $500,000. However, this multiple can vary based on your family’s specific needs and expenses.

4. Children’s education: If you have children or plan to, you might want your insurance to cover their education costs. The price of college tuition, room, and board can be significant, so factor in these potential future expenses.

5. Partner’s financial independence: If you have a spouse or partner who relies on your income, consider how long it would take for them to become financially self-sufficient, if at all. Life insurance can provide a buffer during this adjustment period.

6. Inflation: Keep in mind that the cost of living rises over time. Ensure that the coverage you choose today can account for future inflation to maintain your family’s purchasing power.

7. Other financial commitments: Do you have any other financial obligations or future plans, like starting a business or charitable donations? Factor these into your coverage amount.

8. Existing assets: Deduct any savings, investments, or other life insurance policies you have. The remaining amount can give you a clearer picture of the gap you need to fill.

Although there’s no one-size-fits-all answer to how much life insurance you need, using the above factors it’s fairly easy to get a good estimate. Our life insurance need calculator can also help.

Summary: Best life insurance for young adults

Buying life insurance is so, so important for families because it provides financial protection in the event of an unexpected death. If your family would struggle financially if you or your spouse died, buying term life insurance should be at the top of your financial to-do list.

We picked Ladder as the best life insurance company for young adults because it easy to get life insurance quotes online or the old fashioned way, compare premiums and purchase a policy.

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