Life Insurance: It’s Not as Expensive as Might Think

When you’re starting to build wealth, balancing a career, student loans, perhaps a mortgage, or a young family, the idea of adding life insurance to your financial plan might seem like just another expense you can't afford. Many people in their 20s and 30s don’t even think about it because they believe it’s too expensive.

However, the truth is: most people overestimate the cost of life insurance by nearly three times its actual price (according to LIMRA and Life Happens).

So why is there a disconnect?

There are a few reasons young professionals and early accumulators hesitate to buy life insurance:

• Optimism Bias: It’s natural to feel invincible when you’re young and healthy. We tend to underestimate risks and assume we’ll have plenty of time later.
  
  
• Cost Misperception: Studies show that Millennials and Gen Z often think coverage costs hundreds of dollars a month. In truth, a healthy 30-year-old can often get a 20-year, $500,000 term policy for less than the price of a streaming subscription.
  
  
• Competing Priorities: With retirement accounts to fund, debts to pay off, and experiences to enjoy, life insurance can feel like something you’ll “get around to eventually.”

Why Life Insurance Belongs in Your Plan Now

Here’s the case for making life insurance part of your strategy while you’re still accumulating wealth:

Affordability Is Highest Early: Premiums depend on age and health. Locking in a policy in your 20s or 30s means paying the lowest possible rate, and those rates stay the same for the duration of the term.

Protecting Loved Ones (and Co-Signers): Even if you don’t have a spouse or kids yet, you may have parents or family members who co-signed student loans or helped you financially. Insurance ensures they’re not burdened if something happens.

Flexibility for the Future: Life insurance isn’t just about today; it’s about preparing for what’s ahead. Buying early makes sure coverage is in place before health or lifestyle changes could raise costs or make it impossible to get.

Foundation for Building Wealth: For some, permanent policies with cash value can serve as an asset class within your broader investment strategy.

Life insurance may not seem urgent in your early savings years, but waiting only makes it more expensive or harder to qualify for. By getting coverage now, you protect your loved ones, lock in affordable rates, and know your financial foundation is more secure.

In short, don’t let misconceptions about cost hold you back. Life insurance might be one of the smartest, most affordable steps you take while building your wealth. At the very least, it’s worth exploring to understand coverage and cost better, so let us know if you’d like to discuss it further.