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Insights & advice

Should you get life insurance if you’re single or young?

August 2022 – 15 min read

Key takeaways

  • Being young and healthy are good reasons to get life insurance

  • You’ll likely pay less for life insurance the younger you are

  • Getting married, having a child, buying a home or starting a business are all good reasons to get life insurance

  • There are 2 basic types of life insurance: term and permanent

  • The cost of your life insurance is based on several factors

  • Most Canadians prefer to buy life insurance by meeting in-person with an advisor

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Reasons for getting life insurance when you’re young

In your 20s, you may believe you don’t need life insurance because you’re young and healthy. And if you’re single, you may not have anyone depending on your income. 

So why should you get life insurance when you’re young? 

  • Lower cost

    The cost of your life insurance is based on your age, gender at birth, lifestyle, occupation, medical history and current health. If you’re young and healthy, the cost of your life insurance will likely be lower than if you wait until you’re older. If you’re fortunate enough to have gotten life insurance as a child, your cost will even be lower.

  • Financial protection

    If the unexpected happened, having even a small amount of life insurance could help relieve those you leave behind from having to pay for your funeral expenses. It could also help cover any debt you may already have including student and other loans.

  • Securing your ability to get insurance

    The time to get life insurance is when you’re young and healthy, before you develop any pre-existing health conditions that could make it more difficult to get coverage when you’re older.

Life insurance milestones

There are often life events that motivate people to consider getting life insurance.

  • Marriage

    You’re now making financial decisions as a couple. Life insurance can help keep 1 spouse’s death from financially devastating the other.

  • Becoming a parent

    Life insurance can help provide for your child and your family if something happens to you.

  • Buying a home

    With life insurance coverage you can help make sure your family can pay off the mortgage and other expenses if the unexpected happens.

  • Starting a business

    When 2 or more partners start a business, having life insurance can provide funds to allow surviving partners to run the company.

Types of life insurance

There are 2 basic types of life insurance coverage: term and permanent. Each has unique features designed to meet different needs.

Term insurance

  • Temporary coverage
  • Lower cost
  • Fixed payments
  • Option to convert to permanent 

Permanent insurance

  • Lifetime coverage
  • Higher cost
  • Flexible payments
  • Opportunity to build cash value 

What is cash value?

With permanent life insurance, as you pay for your coverage, a percentage is kept in the policy (within limits) and accumulates interest. You can access this cash value later to pay for a wedding, home purchases, children's schooling, and even vacations. This money usually grows and is usually withdrawn without having to pay tax on it

Life insurance through your workplace benefits

You may have some life insurance through your workplace benefits. However, the trend today is to switch employers every few years. This means you’ll likely lose your employer-provided life insurance provided every time you change jobs, and a new employer may not offer the coverage you need.

Also, the insurance coverage you get through your workplace is normally basic. Your workplace human resources department can give you details on your workplace insurance coverage, and your advisor can help you determine if it’s enough to meet your needs, or whether you should be supplementing it with individual life insurance.

How much life insurance do you need?

The amount of insurance you need will depend on what you’re using it for. For sure, you’ll want to make sure your insurance covers any debts you may have. 

The best strategy is to meet with an advisor who can look at your financial situation and help decide which type of insurance and amount of insurance best meets your needs. According to the Life Insurance Marketing and Research Association (LIMRA), 77% of people under age 35 prefer to purchase life insurance by meeting in-person with someone.1

How much does life insurance cost?

It depends on the type of coverage you choose. Generally, term insurance is more affordable than permanent insurance. But there are a lot of factors that determine the cost of your policy.

What’s next?

Now that you understand more why you should get life insurance if you’re single or young, you may want to contact your advisor to:

  • Determine how much life insurance to purchase

  • Determine what kind of life insurance to buy

  • Discover how life insurance fits into your financial plan

The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.

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