Life Insurance For Young Adults: Our Pick Of The Best

With the help of our life insurance partner, Lifesearch we pulled together the top five providers for a 30-year old buying £200,000 worth of level term cover (where the pay-out remains fixed whenever throughout the term) over 25 years. The quotes listed relate to a healthy, single applicant. You can find full details in our methodology, below.

We obtained life insurance quotes through Lifesearch, our life insurance partner, for a single 30-year old (insurers are not permitted to price based on gender).

We assumed that the individual was a healthy non-smoker, with no pre-existing medical conditions, and working in a low-risk job. On this basis we looked for £200,000 worth of level-term life cover spanning 25 years.

We then looked at the percentage of life insurance claims each provider paid out, as well its customer service score (Fairer Finance, April 2024).

With all premiums coming in at under £10 a month and a price differential, in some cases, of pennies, we weighted the results on:

• Percentage of claims paid
• Customer service score
• Any other benefits that come free with the policy

All policies listed offer a funeral pledge of at least £5,000 which bridges any gap in costs between the funeral and getting the full payout. All come with the option to be written in trust.

We listed only policies that cover terminal illness as standard. This means the policy will pay out on terminal illness or death (whichever happens first).

Critical illness cover will need to be added separately to the policy, and could increase the monthly premium you are quoted.

In line with industry standard, none of the life insurers provide cover for suicide for the first 12 months.

Buying life insurance isn’t about your age – it’s about the stage of life you’re at. Whatever age you are, key life events may prompt the need for life insurance. These can include buying a property, getting married or having a baby.

Sadly, awful things happen no matter your age and life insurance is there to financially provide for anyone who depends on you. In other words, if you have dependants, you should have life insurance.

You’ll pay a monthly or annual premium and, if you die during what’s called the ‘term’ of the policy (you select this length of time – say, 25 years), a lump sum*, chosen by you, will be paid to your loved ones.

This can be used to clear a mortgage, say, pay for childcare, and provide a cash buffer to cover any other debts and day-to-day costs.

*There is a type of policy that pays a monthly income from the point of your death until the end of the policy term – this is often called family income benefit.

First, if you need life insurance because you’ve got dependants, then it doesn’t matter how young you are. But the added benefit of taking out your policy when you’re young means your premiums will be lower than if you wait for a few years.

Life insurance companies take into account your age and health when setting your premium and, other factors to one side, younger people pay less than older ones.

Besides your age, your general health and job will also affect how much you pay for a life insurance premium. If you’re a smoker, you’ll pay more for your cover. How likely you are to suffer an accident at work can play a massive part in the cost. A desk job is considered far less risky than, say, manual work on a construction site.

The level of cover and type of policy you want will also impact on your premiums. The bigger the potential pay-out, the more you’ll pay. You’ll also pay more for particular types of life insurance – such as cover that runs throughout your life, rather than for a specific period.

But premiums tend to be cost-effective when you’re young, and can be tailored your budget.

The different types of life insurance policies can seem baffling, and the right one for you will depend on your personal situation.

Typically, term insurance tends to be the most popular type for young people. You choose the term so you can arrange the policy to run until, say, your mortgage is paid off, or your kids are likely to be financially independent.

You can get level term insurance, with the amount of cover staying the same for the length of the policy. Or, you can get decreasing term insurance, which tends to be cheaper. With this policy, the amount of cover reduces over the length of the policy – this is often taken out alongside a mortgage, where the amount you owe also decreases over time.

As mentioned earlier, family income benefit doesn’t pay a lump sum. Rather, it pays a regular amount (again, chosen by you) to your dependants each month.

You can buy life insurance that lasts for your entire life, regardless of how long you live – it’s known as ‘whole of life’ cover. It’s usually more expensive than term cover and it isn’t designed to do the same job – it’s usually bought for estate planning and investment purposes, rather than to protect your dependents against your unexpected and premature death.

Here are some key tips to consider before making a decision on a policy.

• Make sure the level of cover you have will pay for all the essentials – such as clearing your mortgage, alongside other debts too, if you wish, and ongoing living costs for as long as required by your family. As a general rule of thumb, experts say that around 10 times your salary is a good starting point, but make your own calculations
• If you’re not earning – maybe you’re looking after the home and children – you may still want to have life insurance. The proceeds of the policy could then be used to pay for these tasks to be done if you’re not around, enabling your partner to carry on earning
• Check what existing cover you have. If you’re an employee, you may find you have what’s known as ‘death in service’ cover as a work benefit. This usually provides four times your salary as life insurance, reducing the amount of cover you need to buy on your own policy
• Do you need joint life insurance, which covers both you and your partner? This can be cheaper than buying two policies, but consider the risks. If you passed away, your partner would get a lump sum, but they would then be left uninsured. And, if you both passed away at the same time, there will only be a single pay-out to those left behind
• Do you need critical illness alongside life insurance? These are often sold together, but it’ll increase the cost. Critical illness pays out if you’re diagnosed with one of the serious illnesses listed on the policy
• Do you have any particular pre-existing health conditions, and are you a smoker or vaper? Be honest with the insurer, or you risk invalidating your policy.

It’s never too later to financially protect your family. Life insurance gets more expensive as you get older, but you can still get cover if you need it. You can even get cover if you’re retired, but most people take out policies while they’re still earning.