Life insurance plays a significant role in our lives, irrespective of our age or life stage. Its importance can't be overstated. This article will take you through how your life insurance necessities evolve and change as you progress through various life stages.
Becoming Independent
During young adulthood, we start to become independent and self-sufficient. However, the death of a young single adult typically doesn't create a financial hardship for others. Hence, life insurance isn't a priority for most.
However, some argue that purchasing life insurance while healthy and rates are low is a wise decision. Especially if there's a high risk of developing a medical condition later in life. Another aspect to consider is the potential earnings from investing the money instead of spending it on insurance premiums.
If you have a joint mortgage or other loans with a cosigner, your death would leave the cosigner responsible for the entire debt. In such cases, you should consider purchasing enough life insurance to cover these debts.
Tying the Knot
For childless married couples, life insurance is typically not a necessity. However, the situation changes as soon as you buy a house. Even if both spouses have well-paying jobs, a mortgage may be too much for the surviving spouse to afford on a single income.
To ensure that either spouse could carry on financially after the death of the other, both should purchase a modest amount of life insurance. At a minimum, it will provide peace of mind knowing that both are protected.
Expanding Your Family vs Insurance
When you start a family, your life insurance needs peak. In most situations, life insurance for both parents is appropriate.
Single-income families are entirely dependent on the income of the breadwinner. If he or she dies without life insurance, the consequences could be disastrous. The death of the stay-at-home spouse would necessitate costly day-care and housekeeping expenses. Both spouses should carry enough life insurance to cover the lost income or the economic value of lost services that would result from their deaths.
Climbing the Career Ladder
Career advancement often means starting a new job or even starting your own business. It's crucial to review your life insurance coverage each time you leave an employer.
Keep in mind that your employer-sponsored group life insurance coverage usually ends when you leave your job. You should find out if you're eligible for group coverage through your new employer or look into purchasing life insurance coverage on your own.
Becoming Single Again
In the event of a divorce, you'll need to decide what to do with your life insurance. Divorce raises both beneficiary and coverage issues. If you have children, these issues become even more complex.
If you and your spouse have no children, it may be as simple as changing the beneficiary on your policy and adjusting your coverage to reflect your newly single status. However, if you have kids, you'll want to ensure that they, rather than your former spouse, are provided for in the event of your death.
Entering Retirement
Once you retire, your life insurance needs may change. If fewer people are depending on you financially, your mortgage and other debts have been repaid, and you have substantial financial assets, you may need less life insurance protection than before.
But, it's also possible that your need for life insurance will remain strong even after you retire. For example, the proceeds of a life insurance policy can be used to pay your final expenses or to replace any income lost to your spouse as a result of your death.
In conclusion, it's clear that life insurance plays an integral role at every stage of life. The demands and necessities of life insurance change and evolve, just like our lives do. So, it's crucial to review and update your life insurance policy regularly to ensure it meets your needs.
Looking for the best solution to your insurance needs? We can help!
Comments