Life insurance probably isn’t at the top of your financial to-do list while you’re busy building your career and planning for the future. But here’s the thing—getting coverage while you’re young can save you money and set you up for long-term financial security. Not only are premiums lower when you’re younger and healthier, but life insurance can also help protect your loved ones, cover debts, and even play a role in your overall wealth strategy. Whether you’re just starting to explore your options or looking to make a smarter financial move, this guide will walk you through everything you need to know—without the complicated jargon.
Why Life Insurance Matters Now
As you build your career and financial stability, life insurance does more than just provide a death benefit—it can be a powerful financial tool for wealth transfer, business succession planning, and even diversifying your financial portfolio.
For young professionals—especially high earners—life insurance is less about replacing lost income and more about protecting long-term wealth. And the best part? Locking in coverage when you’re young means lower premiums and a chance to build cash value over time.
And more young adults are starting to realize this. A recent study found that 50% of Millennials and 44% of Gen-Z are considering purchasing life insurance within the next year. This shift signals a growing awareness that life insurance isn’t just for older generations—it’s an important financial move for anyone looking to secure their future.
Understanding Life Insurance
Life insurance is designed to financially protect your loved ones if something happens to you. But not all policies work the same way.
There are two primary types of life insurance:
- Term Life Insurance – Provides coverage for a set period (e.g., 10, 20, or 30 years) and pays a death benefit if you pass away during that time.
- Permanent Life Insurance – Offers lifetime coverage and includes a cash value component that can grow over time.
Each option has different benefits, so the right choice depends on your financial goals and current situation.
Understanding Your Options
Term Life Insurance: Affordable and Straightforward
Term life insurance is the simplest and most budget-friendly option. It provides coverage for a set number of years and is ideal for:
- Covering financial obligations like a mortgage or student loans
- Ensuring dependents or family members are financially protected
- Getting maximum coverage at minimal cost while young
For example, a 30-year-old non-smoker can expect to pay about $16 per month for a $250,000 term policy, while a 50-year-old could pay more than double that. Locking in a policy early can save you a significant amount over time.
Permanent Life Insurance: Lifetime Coverage & Wealth-Building
Permanent life insurance goes beyond basic coverage—it includes a cash value component that can grow over time. This can be useful for:
- Estate planning and tax-efficient wealth transfer
- Accessing cash value for emergencies or investment opportunities
- Providing lifelong financial protection
For example, a 30-year-old non-smoker would pay around $238 per month for a $250,000 whole life policy, while a 50-year-old would see premiums rise to $543 per month. Whole life is significantly more expensive than term life, but it provides long-term financial benefits beyond just a death benefit.
There are two common types of permanent life insurance:
- Whole Life Insurance – Fixed premiums, guaranteed growth, and steady cash accumulation.
- Universal Life Insurance – More flexibility in premiums and benefits, with investment-based growth potential.
How Much Life Insurance Do You Need?
Your coverage should be based on your financial obligations and future goals. Consider:
- Income replacement: If something happens to you, how much would your family need?
- Debts: Mortgage, student loans, car loans—these need to be covered.
- Dependents: Kids? Aging parents? Consider future financial needs.
- Final expenses: The average funeral costs $7,000–$10,000.
How Much Does Life Insurance Cost?
Several factors affect life insurance costs, including age, health, and lifestyle. Here’s a general idea:
The younger and healthier you are, the lower your premiums will be. Locking in coverage early can save you thousands over time.
Beyond the Basics: Extra Perks of Life Insurance
Many modern life insurance policies offer benefits beyond just the payout, including:
- Cash Value Access – Borrow against your policy for investments or emergencies.
- Living Benefits – Some policies allow withdrawals for chronic illnesses.
- Long-Term Care Riders – Helps cover medical expenses in case of disability.
- Creditor Protection – In many states, life insurance cash value is protected from lawsuits.
Making the Right Choice
When choosing a policy, consider:
- What’s your main goal? Income protection, wealth-building, or both?
- How long will you need coverage? 10 years? A lifetime?
- What’s your budget? Monthly premiums should fit comfortably within your financial plan.
- Do you want flexibility? Universal life offers adjustable premiums, while whole life has fixed rates.
If you’re not sure what’s best, working with a licensed financial advisor or insurance broker can help you tailor a policy to your needs.
The Best Time to Get Life Insurance? Now.
Life insurance isn’t just for older adults or parents—it’s a smart financial move at any stage of life. Whether you go with a term policy for low-cost protection or a permanent policy to build wealth, the key is to act early while you have the most options available.
Remember, the best time to buy life insurance is before you think you need it. Your future self (and your loved ones) will thank you.
Ready to develop a life insurance strategy tailored to your unique financial situation? Shania Uhteg at HBKS Wealth Advisors can help you create a customized insurance solutions for young professionals with growing net worth and needs. Contact Shania today for a confidential consultation to explore how the right life insurance strategy can protect and enhance your financial future.
Disclosure
The information and examples included in this document are for general, educational, and informational purposes only. It does not contain any financial or investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any financial or investment advice. If you would like financial or investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.
Any investment involves some degree of risk, and different types of investments involve varying degrees of risk, including loss of principal. It should not be assumed that future performance of any specific investment, strategy, or allocation (including those recommended by HBKS Wealth Advisors) will be profitable or equal the corresponding indicated or intended results or performance level(s). Past performance of any security, indices, strategy, or allocation may not be indicative of future results.
The historical and current information as to rules, laws, guidelines, or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified but was obtained from sources believed to be reliable. HBKS Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.
HBKS Wealth Advisors is not a legal or accounting firm, and does not render legal, accounting or tax advice. You should contact an attorney or CPA if you wish to receive legal, accounting or tax advice.
