TABLE OF CONTENTS: What is Life Insurance? Why Life Insurance Matters in Your 20s-40s Locking in Lower Rates Protecting Your Loved Ones Covering Final Expenses Tax-Free Payouts The Cost of Life Insura...
We have different needs at different stages of life. A young Gen Zer entering the workforce for the first time will have an entirely different path and goals than their Gen X counterpart who can see retirement in their near future. A newly married couple will have different priorities than their neighbors who have two kids leaving for college.
No matter where you are in life, when it comes to protecting the financial future of your loved ones, preparation for the inevitable and the unexpected is critical. Obtaining a life insurance policy can help ensure your family’s immediate needs are met and financial future are properly protected in the event of your passing. But how do you know if you need it?
I’m a stay-at-home spouse with kids. Do I need life insurance?
Between meal prep, chauffeur duties, grocery shopping, and the countless other tasks, experts estimate the median time worked for stay-at-home spouses reached 106 hours per week during the COVID-19 pandemic. That’s a fair market salary equivalent of $184,820.
If you’re a stay-at-home spouse, you know how hard (not to mention expensive) it would be for your family to find help covering your responsibilities. A life insurance policy would help cover those costs.
Do I need life insurance if I’m in my 20s?
While life insurance is typically something that people start to seriously think about when they get married or become parents, single people can also reap the benefits of having a policy. The younger you are, the more you can benefit from lower premiums.
Statistically speaking, young people are further away from death. Insurance companies typically consider younger individuals a lower risk, which means their premiums for a term life insurance policy tend to be lower.
Likewise, if you opt for a whole life insurance policy, you'll have the opportunity to lock in a reduced life insurance rate, keep it over time, and build up cash value, which you may access in the future.
I’m single and don’t have kids. Do I need life Insurance?
One of the biggest misconceptions about life insurance is that it’s only a suitable solution for someone that may leave behind a spouse and/or children after they pass away. The reality of the situation is that life insurance is a product appropriate for everyone, even if you are single and have no children.
If you do not have a spouse and/or children, the probability of you having additional discretionary income is probably pretty high. Therefore, now makes the perfect time and opportunity to build a life insurance policy into your budget. Even though you may not have dependents now, there’s a pretty healthy chance you will have some in the future, whether that be a spouse, child, or family member. You can breathe a sigh of relief knowing your future dependents will be taken care of because of the responsible decisions you made when you when you were but a mere “table for one.”
Another point to consider, if you are charitably inclined, life insurance proceeds can be left to your favorite church, school, or non-profit. With the general low cost of life insurance, you may leave a substantial contribution upon your death to a cause you care deeply about with minimal outlay.
I’m about to retire. Do I need life insurance?
If you’re nearing retirement age, it is a good time to review your life insurance coverage and current needs. In the best-case scenario, your retirement portfolio is in good shape and you have more than enough saved to meet your needs for the duration of your life and provide for your loved ones should you die prematurely.
But if things didn’t go as planned—and they often don’t—you may still need some form of life insurance to protect your loved one’s needs and accomplish the goals laid out in front of you.
I’m a new homeowner! Does this impact my life insurance needs?
Maybe. Let’s say you’ve purchased a home with a 30-year mortgage and are interested in securing life insurance. If one of your biggest considerations is ensuring your mortgage balance will be resolved after your passing, then you may want to consider obtaining a 30-year term insurance policy.
If I have life insurance through work, do I need another policy?
It depends. While your employer’s policy is a great benefit, if you ever leave your company, you’ll most likely lose the coverage. Depending on your age and health, it could be quite expensive or difficult to find a policy that provides a similar benefit. Buying an individual policy to complement the group policy through your employer makes sense.
How often should I renew my life insurance coverage?
From getting married or divorced to changing careers or income levels to caring for aging parents, life can throw a lot of curveballs. As your relationships and professional roles evolve, your financial planning and insurance needs may change.
When your life circumstances shift moderately, consider reviewing your policy options to make sure you have coverage suited to your current situation.
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