The exact types of insurance you need in your 20s, 30s and 40s (2024)

  • You need to buy insurance to protect yourself, your family and your wealth.
  • An insurance policy could save you thousands of dollars in the event of an accident, illness or disaster.
  • As you hit certain life milestones, some policies, including health insurance and auto insurance, are virtually required, while others like life insurance and disability insurance are strongly encouraged.

The exact types of insurance you need in your 20s, 30s and 40s (1)

Insurance isn’t the most thrilling to think about, but it’s necessary for protecting yourself, your family and your wealth.

Accidents, illness and disasters happen all the time. At worst, events like these can plunge you into deep financial ruin if you don’t have insurance to fall back on. Some insurance policies are unavoidable (think: car insurance in most U.S. states), while others are simply a smart financial decision (think: life insurance).

Insurance is largely personal, though, and the type of policy or amount of coverage that’s right for you and your financial situation usually won't match your friend’s or relative’s. Plus, as your life changes (say, you get a new job or have a baby) so should your coverage.

Below, we’ve explained briefly which insurance coverage you should strongly consider buying at every stage of life. Note that while the policies below are arranged by age, of course they aren't all set in stone. If you become a homeowner in your 40s instead of your 30s, for example, that’s when the need for homeowners insurance will kick in.

Here’s a brief overview of the policies you need and when you need them:

Insurance you need in your 20s

Health insurance

Most Americans need insurance to afford health care. Choosing the plan that’s right for you may take some research, but it serves as your first line of defense against medical debt, one of biggest sources of debt among consumers in the U.S.

Some 158 million Americans get health insurance through their employer or a spouse’s employer, according to the Commonwealth Fund. Employees who are eligible for coverage through work usually don’t need supplemental health insurance.

If you don’t have health insurance through your job, you can shop the Health Insurance Marketplace for private insurance options or compare rates through a third-party broker. Remember that you can stay on your parents’ health insurance coverage until age 26.

You’ll stop needing it: Never.

Auto insurance

In 49 of the 50 U.S. states, drivers are required to have auto insurance to cover any potential property damage and bodily harm that may result from an accident.

Car insurance rates are largely based on age, credit, car make and model, driving record and location. Some states even consider gender. The average cost of car insurance premiums nationwide is $125 a month and can fluctuate based on the number of claims and traffic violations a driver obtains.

You’ll stop needing it: When you stop driving a car.

Renters insurance

Renters insurance is the epitome of the umbrella theory: While it may feel burdensome to carry around, you’ll sure be glad it’s there when it rains.

If you’re living on your own — i.e. not with your parents or on a college campus — you probably need renters insurance.Policies differ depending on location, type of home, and coverage amount, but they’re generally low cost — most people pay between $15 and $20 a month — and cover the replacement of your personal property as well as a temporary living situation should you be unable to occupy your rented home.

You’ll stop needing it: When you stop renting.

Disability insurance

Disability insurance is meant to provide income should you be disabled and unable to work. It’s estimated by the Social Security Administration thatover 25% of today's 20-year-oldswill be disabled before retirement.

If you’re relying on a steady paycheck to support yourself or your family, you should have disability insurance. Most people who are traditionally employed should be able to secure a policy through their employer, while people who are self-employed will have to take out an individual policy. Some people may prefer the increased coverage provided by buying private policies to supplement those from their employers, specifically for long-term disability insurance.

Disability insurance can replace income not only in the event of an on-the-job accident, but also during lapses in work due to chronic illnesses.

You’ll stop needing it: Once you exit the working world around age 65, which is often the end of the longest policy you can buy.

Insurance you need in your 30s

Life insurance

If someone else — children, a spouse, aging parents or anyone else who could be considered some level of dependent — relies on your income for their financial well-being, then you probably need life insurance.

Most experts recommend term life insurance for cheap and straightforward coverage, but the right policy for you will depend on your overall financial situation.Term life insurance, unlike permanent life insurance, provides coverage for a fixed amount of time, usually 10, 20 or 30 years. Buying a term life insurance policy when you're young can help lock in an inexpensive rate for the duration of your coverage. It will only increase incrementally each year you age.

How much you pay depends onhow much coverage you want, the type of policy you get, and how much risk you pose. The average person can expect to paybetween $300 to $400 a yearfor life insurance.

You’ll stop needing it: When your dependents are no longer relying on you for financial support.

Homeowners Insurance

Most mortgage lenders require homeowners insurance, which should cover everything from the structure itself to your belongings to liability should someone be injured on your property.

An insurer will consideryour home’s location, as well as the size, age and build of the home to determine your insurance premium. Houses in wildfire-, tornado- or hurricane-prone areas will almost always command higher premiums.

You’ll stop needing it: If you sell your home and go back to renting, or make other living arrangements.

Pet Insurance

It may not be considered a must-have, but if you’re the type to shell out $8,000 for your dog’s surgery, it might be worth considering. Some plans even cover routine vet visits and vaccinations, and most will reimburse up to 90% of your vet bills.

Insurance policies for dogs are typically more expensive than policies to insure cats, ranging from $330 to $530 a year, on average, for accident and illness coverage.

You’ll stop needing it: When you no longer own a pet.

Insurance you need in your 40s

Long-term care insurance

Long-term care isn’t covered by Medicare, the government-run health insurance program for Americans over 65. For people who are aging or disabled and need help with daily living, whether in a nursing home or through hospice, long-term care insurance can help shoulder the exorbitant costs.

This is the sort of thing people don’t think about until they get older and realize this might be a reality for them, but of course, as you get older you get more expensive to insure. That's why it’s a good idea to start looking at long-term care insurance well before you need it. Still, many long-term care policies incrementally increase premiums as you age.

You’ll stop needing it: Never.

This article was written by Tanza Loudenback from Business Insider and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

The exact types of insurance you need in your 20s, 30s and 40s (2)

The exact types of insurance you need in your 20s, 30s and 40s (2024)


What type of life insurance should I get in my 30s? ›

30 to 60 years old

Whole life or universal life policies, if you can afford permanent coverage, can provide more financial security for your loved ones. But if you have a lot of debt, you may opt for a high-value term life insurance policy until the debt is paid down.

What are the 4 recommended type of insurance? ›

Four types of insurance that most financial experts recommend include life, health, auto, and long-term disability.

What are the three 3 main types of insurance? ›

Insurance helps protect you from expensive lawsuits, injuries and damages, death, and even total losses of your car or home. Sometimes, your state or lender may require you to carry insurance. Although there are many insurance policy types, some of the most common are life, health, homeowners, and auto.

Which type of insurance do you believe is the most important during early adulthood? ›

If you don't already have life insurance, you'll want to get it when you first reach one of these milestones. Life insurance will afford your spouse financial stability if you die unexpectedly. That's especially important if your spouse relies on your income to pay the bills.

Is life insurance worth it in your 40s? ›

There are other reasons to buy life insurance at this age beyond supporting your immediate family, including: Covering your funeral, burial or cremation costs. Paying off debt, such a mortgage or loan, so the remainder doesn't fall to your heirs. Leaving an inheritance for your children or grandchildren.

Should I get life insurance in my 40s? ›

Life insurance can replace more than just lost income (non-working partners need it, too). Though life insurance gets more expensive as you get older, it's still quite affordable at age 40. One rule of thumb is to buy 10 times your salary, but you might need more or less coverage.

What insurance do I need at 25? ›

Insurance you need in your 20s
  • Health insurance. Most Americans need insurance to afford health care. ...
  • Auto insurance. ...
  • Renters insurance. ...
  • Disability insurance. ...
  • Life insurance. ...
  • Homeowners Insurance. ...
  • Pet Insurance. ...
  • Long-term care insurance.

What are the 5 C's of insurance? ›

The 5Cs of transformation in insurance are – communication, customization, connection, cognition and consensus. Let's look at each in turn: Communication At its core, insurance is a promise. Now, there isn't much value in a promise if you can't communicate it!

Which is a type of insurance to avoid? ›

Defined Events Coverage

Unless the policy specifically defines a damage-causing event, no coverage will be rewarded to the claimant. Avoid policies in which the defined events are limited, improbable or irrelevant to your situation.

What is the Big 3 insurance? ›

The three largest life insurance companies in the U.S., as per the latest data from the National Association of Insurance Commissioners (NAIC), are New York Life Group, Northwestern Mutual and Metropolitan Group. Together, these industry leaders command nearly 20 percent of the market share.

What is the most common type of insurance? ›

The most common types of insurance coverage include auto insurance, life insurance and homeowners insurance.

What are some basic types of insurance? ›

For Consumers
  • Types of insurance. Auto. Health. Home. Life. Long-term care. Annuities. Business. Boat/marine. Credit insurance. Crop. Dental. Natural disasters. Sharing economy. Surplus line insurance. Travel. Extended warranties & service contracts.
  • Podcast: OIC Answers.

What is the best life insurance for a 20-year-old? ›

Compare the Best Life Insurance Companies for Young Adults in 2024
Best ForTerm Life Sample Cost
ProtectiveBest Overall$22.92/month
Banner by Legal & GeneralRunner Up, Best Overall$22.92/month
Mutual of OmahaBest for Customization$28.38/month
NationwideBest for Living Benefits$26.25/month

What is the best life insurance for people in their 20s? ›

Our top picks for life insurance in your 20s and 30s include Brighthouse Financial, Legal & General America, and Transamerica. If someone relies on your income, you have debt, or you're starting a family, having life insurance can go a long way.

What is the best life insurance for a 40 year old male? ›

Allstate is the best cheap life insurance company for 40-year-olds, with a MoneyGeek score of 97 for this category. It offers a 10-year term policy with $250,000 coverage at $12 per month on average.

Is life insurance worth it in your 30s? ›

Everyone should have life insurance by the time they enter their 30s. We never know what tomorrow may bring. So it's important to take out a policy as soon as possible—even if you don't have children or other dependents yet.

Is it worth having life insurance at 30? ›

If you have a child or partner who depends on your income, or if you have certain types of debt, you should seriously consider getting life insurance. While not every 30-year-old needs life insurance, some would greatly benefit from purchasing a policy.

Should I get life insurance in my 30's? ›

If you're in your 30s, it's time to start thinking about securing your future and providing a financial safety net for your loved ones. Whether you're in a committed relationship, have children, or are navigating the financial responsibilities of home ownership, life insurance can offer invaluable protection.

How much should a 30 year old pay for life insurance? ›

For 30-year-olds: Life insurance costs an average of $14 a month ($162 a year) for a 20-year, $250,000 term life insurance policy for a man age 30 and $12 a month ($143 a year) for a woman age 30, based on our analysis.

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