When you are 25, life insurance feels like something for your parents. But smart financial planning means looking ahead. Purchasing a Term Life policy in your 20s or early 30s is significantly cheaper than buying it in your 40s.
1. Cost: The "Young" Discount
Insurance premiums are based on age and health. A 25-year-old non-smoker might pay as little as $20/month for $500,000 in coverage. Wait until you are 45, and that same policy could cost triple.
2. Debt Doesn't Die With You
Do you have student loans? A car loan? Did your parents co-sign for any of these? If you pass away unexpectedly, that debt may fall on your co-signers. A small term policy protects your parents or partner from inheriting your financial burdens.
Pro Tip
Buy a Convertible Term Policy. This gives you cheap coverage now, but allows you to switch to a permanent policy later in life without a new medical exam, even if your health declines.
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