Life Insurance for Young Adults in Canada: Your 20s and 30s

We all think we’re invincible when we’re younger. That’s why most people in their 20s put life insurance off, and honestly, some of them should.

The young adults who reach out to us are rarely stuck on price. They’re stuck on what to buy and how much: permanent or term, $50,000 or $5 million. This page sorts that out by stage, from 18 to 35, using current premiums from age 20 to 35 across the carriers we compare.

Do You Need Life Insurance in Your 20s or 30s?

Unless you have a major debt, a dependant or someone who relies on your income, you don’t really need life insurance yet. That’s true at 23 and it’s true at 33. What changes between those ages is how likely you are to have one of the three.

You never know if your insurability takes a hit, so sometimes you do it just for insurability purposes. If you’re single and nobody relies on your income, that’s the whole case for buying now, and it’s a fair one to turn down.

On a term policy it’s also easy to undo. If we set it up today and a month later you decide it was a bad idea, we just cancel it.

If a parent bought your policy

When a parent starts a life insurance policy on their child, they typically stay the policy owner and control all the decisions. One client found out when she tried to change the beneficiary on her own policy and couldn’t.

Unless the owner transfers it to you, you can’t change the beneficiary. Ownership can be transferred, but until it is, get your own policy for anything you need to control.

If you’re the parent setting one up, start with our page on life insurance for children.

Is Life Insurance Cheaper When You’re Younger? (What Waiting Really Costs)

As we get older it gets more expensive anyhow, so yes, life insurance is cheaper when you’re younger. What surprises people is how little a 20-year term moves in your 20s, and how much a 30-year term does.

Read down the 20-year columns first: they barely move until 35. The 30-year columns climb the whole way, because that policy runs into your 50s and 60s and the insurer prices those years in from day one.

So if you’re 24 and wondering whether waiting until 28 costs you anything on a 20-year term, it mostly doesn’t. The age isn’t the risk. What lands on your medical file between now and then is.

What one summer did to a 29-year-old’s application

He’d been on the same anxiety medication for years and was stable. He wanted $1 million for 30 years plus disability coverage, and before his file was finished, two things changed.

Here’s what the top of that range means in dollars, using the same $500,000 20-year term for a man from the first column of the table.

That gap is the real argument for buying young. Not the premium, which barely moves in your 20s, but the rating, which can move a lot in a single year.

To see where you’d land today, compare term quotes across carriers. If something’s already on your file, we can check it anonymously with an underwriter first. That informal check isn’t a formal application or an underwriting decision, but you still answer every question on a later application accurately.

How Much Life Insurance Does a Young Adult Need?

Always try to insure for what you’re comfortable paying today, then add to it as life fills up. For most people we set up between 22 and 35, that lands between $500,000 and $1 million.

The most common mistake at this age is going too small. Someone younger doesn’t always understand how valuable their income replacement is over a much longer period of time.

A 32-year-old single parent of three asked us for $200,000 to $300,000 on a $50 to $100 a month budget. 250, in this day and age, just doesn’t go very far. She left with $500,000 for 30 years plus $50,000 of critical illness, still inside that budget.

The other reason to step up is price. Insurance companies discount in those increments, and at 25, $500,000 is almost the exact same price as $400,000, so you might as well go to $500,000.

At this age the limit is rarely what stops anyone. In my experience insurers will say, hey, do 20 times your income or 25 times your income, but for big amounts they want proof.

When you’re in your twenties you might do a certain amount. Then your income goes up, and the truth of the matter is we’d likely increase it in the future.

Want to run your own number? Our guide to how much life insurance you need in Canada walks through the full calculation.

10, 20 or 30-Year Term: What Fits at 22, 28 and 34

Do the longest term you’re comfortable doing, but make sure it’s an amount you can comfortably pay. At this age the price gap between a 20-year and a 30-year term is small enough that the longer one usually wins.

Longer costs more each month, but you’re buying more years. Here’s what that looks like for a man who wants coverage until 55.

That extra $6,048 buys ten years of coverage from 25 to 35, and it keeps the health rating you had at 25.

If a long term doesn’t fit the budget yet, a 10-year term can be just sort of a bridge. Within the first five to seven years, these carriers let you swap it for a term at least ten years longer, with no new medical.

That’s how we set up a 35-year-old who had just quit vaping: a 10-year term at smoker rates now, with a note to requalify as a non-smoker after 12 months and extend.

And if you let a term run out instead, the renewal price jumps. Here’s what happens when term life insurance expires.

Is Work Coverage Enough When You’re Young?

In this day and age, where jobs change so frequently, you just don’t know how long you’ll have your work coverage. That’s why group life alone usually isn’t enough in your 20s and early 30s: it’s tied to the job, not to you.

For a 22-year-old who already had disability coverage through her employer, I’d lean heavily towards not buying more disability yet. The critical illness was for her.

The other coverage that shows up at this age is the one a lender offers with a loan or a mortgage. It’s built to pay the lender.

You want standalone insurance; you don’t want it tied to a loan. A 26-year-old studying abroad had her grandparents co-signing her student line of credit, and the bank’s own coverage turned her down because she’d spent too few days in Canada that year. We placed a standalone simplified-issue policy (fewer health questions and no exam, but still underwritten) that pays her family, not the bank.

If a mortgage is coming, here’s how mortgage insurance compares with your own life insurance.

Can You Get Life Insurance With ADHD, Anxiety or Depression in Your 20s?

Insurance companies look at stability more than anything. I wouldn’t expect an ADHD, anxiety or depression history on its own to stop you from getting coverage, potentially even at standard rates, though severity, treatment, time off work and anything else on your file all count. Six months stable is a good start, and longer is even better, to the point where it can have very little impact.

Anxiety notes from university counselling or a walk-in clinic are part of your history, and applications ask about them. What an underwriter weighs is how steady things have been since. For the 29-year-old above, one change to his antidepressant dose turned his disability application into a 12-month postponement.

Here’s what some insurers’ own underwriting guidelines say about stable, mild cases.

Once we have the full history, including severity, any hospital stays and anything else on your file, we decide whether to apply directly or check with an underwriter first. Six months with no changes often means we can apply directly.

An informal, anonymous check isn’t a formal application or an underwriting decision, and you still answer every question on a later application accurately. For more detail by condition, see our guides to life insurance with a mental health diagnosis and life insurance with a medical condition.

Term vs Permanent Life Insurance for Young Adults

For most people under 30 it’s term, because permanent policies, to be very clear, are really poor value in the early years. They’re not liquid. Permanent makes sense this young when a parent is funding it or your TFSA is already full.

At 25, even a 40-year term costs about a quarter of what whole life does. There’s a sweet spot for universal life, typically between 25 and 50, but only once the basics are covered.

A single 35-year-old with a maxed TFSA asked whether $200 a month should go into universal life instead of more investing. Here’s what the illustration showed.

Universal life illustration, $200 a month to age 55. Illustrated values are not guaranteed and depend on the policy’s investment options and fees. General information, not investment advice.

If you cancel a universal life policy 18 months in, you’re almost giving away everything you put into it, because of surrender charges. If you do go permanent, I want you to have a drop-dead date that doesn’t go to age 100.

The other time it works is when someone else is paying. A father set up permanent policies for his two daughters as a financial head start, and one, a 26-year-old professional, was approved for $2 million without any medical requirements.

When you’re ready, compare permanent life insurance quotes or start with our guide to whole life, universal life and term to 100.

Getting Approved Fast and Paying Less Under 40

Most insurers we work with will do up to at least $2 million without a medical exam if you’re healthy and under 40. That’s the fast part: health questions, sometimes a phone interview, no needles. The cheaper part mostly comes down to nicotine and your birthday.

Any file can still be pulled. A healthy 26-year-old we placed had one insurer’s system ask for blood, urine and vitals right after another insurer approved her for $2 million without any of it. We asked for a review, and the policy issued without them.

Splitting coverage between two insurers can make sense for price or for different term lengths. Every application asks about all the coverage you have in force or have applied for, though, and each insurer sets its requirements on that full picture.

If you’ve just quit, answer honestly anyway. A wrong smoking answer can cause problems later, including at claim time.

We did that for the 26-year-old above. Her policy was dated a month earlier to hold her insurance age, so the first withdrawal covered two months. Here’s more on backdating and saving age.

Nicotine isn’t the only lever. A risky hobby or a dangerous job can move your rate just as much.

Life Insurance for Young Adults: Frequently Asked Questions

Straight answers to what people in their 20s and early 30s ask us most.