Why Life Insurance Matters for Young Adults
July 26, 2022

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Invincibility is a Myth

The golden age of youthdom. We know what it’s like. You’re young. You’re fit and healthy. You’ve got the whole world and a huge range of possibilities before you. It’s a time for optimism, not writing up the will and preparing your funeral playlist.

So why would you be thinking about Life Insurance? It isn’t relevant to you at all, right?


You may think your chances of exiting from this world early are remote. Nothing can touch you. You are in your PRIME!

And it’s true: only a slim minority of young adults will have their lives cut devastatingly short. But who’s to say you won’t be counted in that unlucky lot?

Even if you escape the Grim Reaper’s touch (for now), have you thought about what could happen to your lifestyle if you sustain a serious disability or illness?

How will you pay the rent, or the mortgage you’ve just committed to for your first very own home? How will you cover medical and rehabilitation expenses or even just daily living expenses?

We at Wealth Smart understand that it might be hard to think about these difficult things when all you want to do is enjoy your prime years.

But here are a few reasons why it’s worth taking the time to contemplate Life Insurance now to save you – and your loved ones – more trouble later.

life insurance for young adults

1. You may not have dependants, but you could still have debt (that someone has to cover)…

What a lot of young people don’t realize is that their death would still have a financial impact on their loved ones, even if they don’t have any direct dependants.

We get it. This is the time in your life when you’re FREE! You can borrow what you like and do what you want without being inhibited by anybody else’s wishes. It’s a great feeling.

young person

But that means you’ve also likely accumulated debts. Maybe you have a large credit card debt, a car loan, or even a mortgage. You’re starting to build your life, after all.

These debts don’t disappear when you die. Someone has to pick up a chequebook and start signing away their own hard-earned savings to cover your liabilities.

This is where Life Insurance helps. It pays a lump sum payment of up to $1 million or more in the event of your death (or diagnosis of a terminal illness). That should cover all your expenses – and if they’re lucky, a bit on the side for your loved ones!

But Life Insurance isn’t just about paying off those bothersome debts. There’s the funeral to think about too.

Even cheap funerals can be pretty pricey these days, but with a Life Insurance policy, you can get funeral benefits that will cover the cost of your funeral so you can go out in style – it’s almost like a parting gift to your loved ones (and yourself, let’s be honest).

2. What happens to your income if you’re unable to work?

With youth comes energy and daring. The twenties are the years for pushing the boundaries on life. You may be one of those hooligan snowboarders or crazy base jumpers. You feel invincible so what’s stopping you, right?

We’re all for some derring-do when you’re young and restless. But the greater the feats you perform, the higher your risk of something going terribly wrong. The thrill of danger is what draws you in, after all.

Or you may not be the thrill-seeker at all. But you are still susceptible to many of the same illnesses such as cancer that plague people later in life. Have you thought about what would happen to your lifestyle – or your income – if you were too sick to work?

Should something horrible befall you so that you’re left with a serious disability or illness, what becomes of your income? You may no longer be able to work, temporarily or (god forbid) permanently.

You’re young, but these are the years of building up your life. You may have rent to cover or even a mortgage to pay off. And did you even think about daily living expenses? Then there are the ongoing medical and nursing bills to cover.

Life Insurance, which can include Trauma Insurance, Total and Permanent Disability Insurance and Income Protection, may be the saviour you’re looking for in the event of a serious illness or disability. It can provide you a lump sum payment – or even cover a portion of your income – while you’re unable to work to cover your most important needs.

That means you can put your mind to recovery and recuperation instead of stressing about how to pay the electricity bills!

3. Getting Life Insurance now guarantees protection for life!

If you’ve read this far, it means you’re probably seriously contemplating buying Life Insurance. You know you’re going to need it one day, but you’re just not sure if it’s too soon to commit.

Well here’s arguably the most important reason for buying insurance now, while you’re young, fit and healthy:

You may not always be that way.

It sounds like a no-brainer, but there’s a crucial point to make here: if you postpone buying insurance, who knows what may happen to you. Perhaps you will fall dangerously ill.

And as your circumstances change so too will your eligibility for Life Insurance. Given your state of health, you may no longer even be able to purchase it in later years.

When you apply for Life Insurance, you must meet a number of criteria before you’re approved for cover. When you’re well and strong, you’re much more likely to qualify for insurance cover.

As you get older, it becomes increasingly difficult to get Life Insurance cover because you may have a more extensive history of your own personal illnesses or even evidence of cancer or heart-related diseases in your family.

But if you get Life Insurance young, you can continue to enjoy the same level of cover without having to undergo any medical tests.

You may be concerned that once you’re locked into a Life Insurance policy, you’re trapped. But that’s not the case at all.

With many Life Insurance policies, you can increase your cover whenever an important life event occurs, such as buying a house, marrying your partner, or having a child.

young person city

You’d think it’d be obvious what classifies as an important event, but if you’ve done any research at all by now, you’ll know insurance companies like to complicate things.

Each policy varies on eligible events that would allow you to increase your cover. Make sure you read over the policy’s Product Disclosure Statement so you’re satisfied before you sign.

(And if you’re feeling at all overwhelmed, feel free to contact a Life Insurance adviser to simplify things for you).

4. You could save money in the long run

Even if you do manage to scrape through those bruisin’ twenties with nothing more than some nasty hangovers and a few bumps on the head, having Life Insurance may pay off in the long run.

Now this gets a little complicated, so bear with us.

When you pick a Life Insurance policy, you choose between stepped or level premiums.

Put simply, stepped premiums are recalculated according to your circumstances each time your policy is renewed. So they’ll most likely increase as you get older.

Level premiums are more fixed. Your premium is calculated at the time you take out your policy so they won’t change as you age.

Maybe you’re one step ahead of us and you already know that level premiums are at first more costly. But Life Insurance is a long term plan, and fixing it on a level premium at a younger age means your payments will be cheaper in the long run.

So there you have it. It may seem strange to be thinking about Life Insurance when you feel indestructible. But the truth is no one is invincible.

Being that little bit more prepared can be the difference between being financially responsible should the worst happen or losing that newfound independence by putting your financial burden back on those you love most.

If you sustain a terrible injury or illness, you need all the support you can get. You don’t want to push the boundaries on that support by having to rely financially on those who are already going out of their way to help you.

And should you have that unwanted, undeserved early encounter with Mr Reaper, the only legacy you’ll want to leave your families are the happy memories, not financial stress.

Being youthful means discovering your independence, enjoying your health and fitness, partying and celebrating YOU. But it’s also a time to start being more responsible both towards your loved ones and about your future. If you want to embrace adulthood, be prepared to embrace EVERYTHING that makes you an adult.

Find out more about how to get the best Life Insurance policy to suit your needs – download our TOTALLY FREE eBook today.


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