Married couples generally need more life insurance than single people, but it’s necessary for everyone to have at least enough life insurance to cover his or her final expenses. As you may expect, the amount of life insurance you’ll need will probably change throughout your lifetime. and your life stage will also determine how long your (recommended) term period should be, how much insurance you should purchase and the type of policy that best suits your needs.
Life Insurance in Your 20s?
As you begin your career, you may wonder why one would purchase life insurance at such an early stage in life. The answer is simple – the younger you are, the lower the price will be to insure you.
With student loans, credit card debts and new living expenses, you may believe that life insurance is not something you need right away. However, this couldn’t be farther from the truth. If something were to happen to you, a life insurance policy could be used to cover these outstanding loans and/or debts, so that your loved ones wouldn’t be left with this financial burden.
Individuals often wait until they are either married or in their 30s to purchase a life insurance policy. While going this route isn’t necessarily a bad idea, you could be missing out on an opportunity to secure a low premium rate.
Life Insurance in Your 30s?
If you are in your 30s, you are likely to have assets that need to be protected by life insurance – such as a house, a family and/or your job. If you were proactive and purchased a policy in your 20s, you may only need to purchase a small supplemental policy to cover increased income and additional assets.
However, if you are purchasing life insurance for the first time, make sure that your policy is large enough to pay off your home, cover your family’s financial needs and pay off any outstanding debts. It is recommended to purchase a policy that is 10 times your annual income so that your family can continue to live the lifestyle they are accustomed to.
For married couples, it is recommended that each individual carries their own life insurance policy, even if one if the sole financial provider and the other is a stay-at-home parent.
Life Insurance in Your 40s?
By the time you enter your 40s, your assets have probably significantly grown and, if they are not already protected, will need protection.
It is very important to purchase a policy if you haven’t before, because you may develop health conditions later in life that may make it more difficult to secure an affordable rate. As previously mentioned, your policy amount should be around 10 times your annual income. You may, in fact, want to increase this amount if you are expecting a raise any time in the near future.
If you currently own a life insurance policy, this may be an ideal time to reevaluate your insurance needs and take stock of your finances.
Life Insurance in Your 50s?
Financial priorities may be changing as you enter your 50s. Generally speaking, your children may no longer be financial dependent on you and your mortgage may be completely paid off. If you can associate yourself with these statements, you may find yourself needing less life insurance than in previous years. You may only need life insurance to cover final expenses.
Take this time to reevaluate your insurance needs and make adjustments accordingly.
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Life Insurance in Your 60s?
As like your 50s, you are likely to be past the stage of needing life insurance to financially support your dependents. This doesn’t mean that life insurance isn’t still a great asset for your family. Your policy could be used to cover final expenses or provide an inheritance for your family. If this is your first time buying life insurance, you are likely to pay higher premiums due to age and current health conditions. However, the peace-of-mind that it provides is well worth the cost.
Keep in mind that your choice will be significantly reduced if you wait until after your reach age 65 to purchase a policy. Some companies are more forgiving in this sense than others.
Life Insurance in Your 70s and Up?
While it may seem too late to purchase life insurance in you 70s, this is no longer the case as people are living well into their 90s. In fact, there are some insurance companies that sell policies specifically designed for seniors.
You may find it more affordable to purchase a guaranteed issue policy, as no medical exam is required. Policies like these are ideal for individuals who want to cover final expenses, so that their loved ones wouldn’t have to worry about this expense.
The bottom line is that no matter what stage you are at in your life, there is always some need for life insurance. Working with a licensed life insurance agent is ideal, as they can help you select the right option for you and your insurance needs.