Life Insurance for All of Life’s Stages
A person might need life insurance at different stages of their lifetime. Here are a couple of thoughts on how life insurance can benefit you and your loved ones, at any age.
Children from Birth to Age 18 – Small permanent life insurance plans can be put in place and remain in force for the rest of their lifetime. For a minimal premium, payable to age 18 or 21, the child will have a life insurance policy that provides death benefit protection, with or without a cash value component. An optional rider can guarantee the ability to buy more coverage over their lifetime without evidence of insurability. This may be helpful if the child develops a medical condition or makes lifestyle choices that make it difficult or impossible to buy new insurance.
Ages 18 to late 20’s – At this stage, many individuals have student loan, auto loan, or credit card debt. A low-cost term life policy can provide tax-free liquidity to cover the debt or final expenses in the event of an early death. In addition, policies typically offer long-term guaranteed level premiums and the option to convert some, or all, of the policy death benefit to permanent insurance in the future without evidence of insurability.
Late 20’s through Retirement Age – Although life insurance can never replace you, it does provide peace of mind and tax-free resources to help your family financially if you pass away during your income earning years. The death benefit can pay off mortgage and other debt, fund children’s college expenses and future weddings, and support a surviving spouse throughout their lifetime. The amount of coverage will typically be greater because your financial responsibilities are often greater. Depending upon your circumstances, term insurance and / or permanent insurance may work best from a cashflow and a risk management perspective.
Retirement and Beyond – Insurance at this time can pay off any remaining debt and provide resources to support financial dependents. It can also cover long-term care expenses, guarantee liquidity to pay income or estate taxes, or provide an inheritance to your family members or favorite charity.
Regardless of what stage you are in, it is important to discuss how life insurance planning may be an important component of your overall financial plan.