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Choosing the Best Life Insurance for Young, Single Adults

Russell Cain Fact Checked Updated: 26 April 2023

When you’re under the age of 30, you might be wondering whether life insurance is worth considering. Perhaps you already have some insurance and questioning which policies you should keep, which you need to upgrade and what you can get rid of.

There are a variety of personal insurance types you might want to consider buying while in your 20s and 30s. However, the best option for you depends on your specific requirements. For example, are you employed full time, do you have student loans, are you supporting a sibling or parent and how much outstanding debt do you have.

Life insurance is not just for married couples or people with kids. While not all young and single Australians need life cover, there are several reasons when personal insurance makes sense.

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Do young people need life insurance?

When you’re under the age of 30 you might require personal insurance cover if you have:

  • Credit card debt,
  • Student loans,
  • A mortgage, or
  • Support someone financially, like a parent, sibling, spouse, or child.

You might also want to consider TPD insurance and income protection if you have a job, and trauma insurance to protect you from critical illnesses, for example, Multiple Sclerosis (MS) and major head trauma. Accidents and diseases, like cancer, can happen at any age.

When should you consider buying life cover?

Buying life insurance when you’re young can save you money. Your premiums are generally lower because you’re seen as healthy and less of a risk, compared to older people.

Because select life insurance companies offer policies that are guaranteed renewable, your policy features and benefits can’t be downgraded due to changes in your health or lifestyle, if you continue to pay your premiums. Meaning, the type of cover you get when you’re young can generally continue as you get older, which is when you might need to make a claim.

You might want to consider buying life insurance when you:

Have debt

Covering your debt, especially those that are consigned, should be a priority. Don’t leave your loved ones liable to pay off your credit cards, student loans or car payments if you suddenly pass away. A term life insurance policy can help relieve the burden of debt.

Get a job

If you rely on your salary to pay for day-to-day living expenses, you might want to consider income protection or TPD insurance to protect you should you be unable to work because of an injury or illness.

Have dependents

Insurance is usually a good idea when someone is relying on you for financial support. Even if you don’t have a partner or child, you may still have a business partner, elderly parent or grandparent that depend on you and your income to help them pay the rent or utilities.

Buy a house

Make sure your mortgage will be taken care of if you suddenly died, get diagnosed with a terminal illness or became disabled.

Want cover for your final expenses

Having some life insurance can reduce the stress of leaving your loved ones to pay the cost of your burial expenses.

According to a 2018 Roy Morgan survey, about 44% of Australian Millennials, people born between 1981 and 1997, are married and 1 in 8 own a house. Thus, people in their early 30s and 20s should consider some level of insurance protection.

You’ll never be as young as you are today, and probably won’t be as healthy either, so now might be the ideal time to start comparing policies from some of Australia’s major life insurance companies.

How much life insurance does a single person need?

The amount of coverage you need depends on your requirements and what you can afford. First, check with your super fund to see how much life insurance has automatically been added and decide how much more you need and the types of products, like income protection, you want to add or purchase separately. Then, shop around and start comparing policies to find a plan best suited to your requirements and budget.

Young and single life insurance options

It’s best to be prepared for the unexpected no matter how old you are. However, when in your 20s and 30s the following personal insurance options might be worth considering:

Death cover

Pays a lump sum benefit should you die or be diagnosed with a terminal illness. This payment can help your family pay for your final expenses, and if you have no dependents or outstanding debts, you can leave a bit of money to your loved ones and favourite charities.

TPD insurance

Provides a lump sum payment if you can never return to work because an accident or illness has left you totally and permanently disabled. This benefit can be used to pay your medical bills and help you adjust to your new way of life

Income protection insurance

Pays a monthly benefit, usually up to 75% of your income, if you can’t work for a period because of an injury or sickness. Young professional will benefit from this insurance because it can help you keep up with rent payments, daily-living costs and medical expenses.

Trauma insurance

A once-off amount is paid to you if you’re diagnosed with one of the critical illnesses listed in your policy documents, helping you cover the cost of daily living expenses, medical bills and rehabilitation.

Personal accident insurance and accidental death cover

If you’re unable to get full life insurance because you’re unemployed, a homemaker, self-employed or have a pre-existing condition; you’ll generally still be able to get personal accident insurance, providing you with 75% of your monthly income if you can’t work because of an injury from an accident. You might also want to consider accidental death cover that pays a lump sum benefit if you pass away because of an accident.

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Best life insurance policy for a 30-year-old

The best life insurance for a young person is not one-size-fits-all. The type of cover you need should be based on your specific circumstances, like your occupation and whether you have financial dependents or outstanding debts. However, it’s usually much easier to find affordable life insurance for young adults. Because you’re young and healthy, you can generally get life insurance a lot cheaper than you might be able to a few years down the road when you have a spouse and children.

For example, Josh, a 35-year-old single, non-smoking, male living in NSW, can get $1 million worth of life cover for as little as $34.09 per month on a stepped premium style policy. However, if Josh waited until he was more settled with a growing family, at 42 years old, Josh can expect to pay $48.87 each month for that same $1 million life insurance policy.

In the table below, it’s evident that the longer you wait to take out insurance, the more expensive your premiums will typically be.

Term life insurance rates for people in their 30s and 40s

AgeMonthly premiums
35 $34.09
36 $35.16
37 $36.67
38 $38.49
39 $39.88
40 $41.83
41 $45.10
42 $48.87
43 $52.52
44 $57.49
45 $63.97

The above prices were calculated on stepped premiums for a single non-smoking male living in NSW taking out $1 million life insurance as at November 2018.

Why you might want to consider level premiums when buying insurance young

Level premiums are based on your age when you take out the policy and although they start off more expensive than stepped premiums, they do not increase every year as you age. If you keep your level premium policy for more than 7 years, it is likely to be a lot cheaper options in the long run. 

Frequently asked questions

  • Should I get life insurance if I’m single?

    If you’re single with no partner or children and have no outstanding debt and have a funeral policy, then you might not need a death cover benefit. However, you probably still require some form of protection should you become critically ill, totally and permanently disabled or unable to work because of an injury or illness.

    Carefully consider your specific circumstances and requirements before deciding on the type of life insurance you need and how much cover will be enough.

  • What is the minimum age for life insurance?

    The general entry age for life insurance in Australia is as young as 11. However, you should consider your specific requirements before choosing which type of insurance policy will suit you best.
  • Do college students need life insurance?

    Every person’s situation is different; however, accidents can happen at any time, especially if you partake in dangerous pastimes. As a full-time student, you might want to think about personal accident insurance and accidental death cover for worst case scenarios.

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