By If you’re in your 20s, life insurance might not be the first thing on your mind. After all, you’re young, likely healthy, and may not have major financial responsibilities yet. So, do you really need life insurance in your 20s in Canada?
The short answer is: it depends on your situation. While it’s not necessary for everyone at this age, there are several scenarios where getting coverage early can be a smart move.
In this guide, we’ll explore when it makes sense to buy life insurance in your 20s in Canada, what types to consider, and how much it typically costs.
What Is Life Insurance?
Life insurance is a contract between you and an insurer. You pay monthly premiums, and if you pass away, your designated beneficiary receives a lump sum (also called a death benefit).
There are two main types of life insurance in Canada:
- Term Life Insurance – Coverage for a fixed period (e.g., 10, 20, or 30 years). Lower premiums.
- Permanent Life Insurance – Lifelong coverage with a cash value component. More expensive.
Reasons to Get Life Insurance in Your 20s in Canada
1. Lock in Lower Rates While You’re Young
Premiums are based on age and health. Buying in your 20s means you’ll get the lowest possible rates. As you age, rates increase—even more so if health issues develop.
For example:
- A healthy 25-year-old might pay $15/month for $250,000 of term life insurance
- That same policy could cost $40+/month at age 40
2. You Have Debt That Others May Need to Pay
Do your parents or someone else co-sign your student loan or car loan? If you pass away, they could become responsible. A life insurance policy protects them from that burden.
3. You Have Dependents or Are Starting a Family
If you’re a young parent or planning to become one, life insurance is essential. It ensures your partner or children are financially supported if you die unexpectedly.
4. You Want to Support Your Funeral and Final Expenses
Even a modest funeral in Canada can cost $7,000–$12,000. A small policy (e.g. $50,000) can cover this and any final medical bills.
5. You’re Self-Employed or a Business Owner
If you run a business, life insurance can help pay off business debts or ensure your partner has capital to continue operating.
6. You Want to Leave a Legacy
Even without dependents, life insurance can be used to leave a gift to a sibling, parent, or charity.
When You May Not Need Life Insurance in Your 20s in Canada
You might not need coverage if:
- You have no dependents
- You have no significant debt or co-signed loans
- You have a solid emergency fund
- Your employer already provides sufficient group life insurance
Even then, many still choose a small, low-cost policy to lock in coverage while young.
Types of Life Insurance for Canadians in Their 20s
1. Term Life Insurance
- Most affordable option
- Great for short- to medium-term needs (10–30 years)
- Ideal for paying off debt or protecting young families
2. Permanent Life Insurance (Whole Life or Universal)
- Lasts for life
- Builds cash value over time
- More expensive, but can act as a savings/investment tool
If you’re just starting out financially, term insurance is usually the smarter choice in your 20s.
How Much Does Life Insurance Cost in Your 20s?
Monthly premiums are generally very affordable in your 20s:
| Age | Coverage Amount | Monthly Premium (Term Life) |
|---|---|---|
| 22 | $250,000 | $13–$17 |
| 25 | $500,000 | $18–$25 |
| 29 | $1,000,000 | $30–$40 |
These are average rates for healthy, non-smoking applicants. Rates vary by insurer.
Common Myths About Life Insurance in Your 20s
“I’m too young to need it.”
Emergencies can happen at any age. Life insurance isn’t just for older adults.
“It’s too expensive.”
Not true! Rates are lowest in your 20s.
“I don’t have kids, so I don’t need it.”
You may still want to cover debts, final expenses, or leave a legacy.
“I can always get it later.”
Yes, but you’ll likely pay more—and health changes can make it harder to qualify.
How to Choose the Right Policy
- Decide on your goal (debt protection, family coverage, investment?)
- Choose a term that matches your needs (10, 20, or 30 years)
- Compare quotes from Canadian providers (PolicyMe, Canada Life, Sun Life, etc.)
- Look for no-medical options if you want fast, hassle-free approval
FAQs
1. Can I get life insurance if I have health issues in my 20s?
Yes, but premiums may be higher. No-medical policies may be an option.
2. Can I cancel my life insurance later?
Yes. Term policies are flexible. You can cancel anytime without penalty.
3. Should I get life insurance through work?
Group plans are good, but usually limited. Consider adding personal coverage.
4. Is it better to buy term or permanent life insurance?
In your 20s, term is usually better unless you want long-term investment benefits.
5. Can I change my policy later?
Many term policies offer conversion to permanent coverage without a medical exam.
Final Thoughts
Getting life insurance in your 20s in Canada isn’t about expecting the worst—it’s about protecting your future. If you have financial responsibilities or want to lock in low rates while you’re young, it’s worth serious consideration.
A simple term policy could cost you less than the price of a daily coffee—and give you years of peace of mind.
Before deciding, shop around, understand your goals, and talk to a licensed insurance advisor if needed. Starting early puts you in control of your financial security.
Stay smart. Stay covered.
