Life Insurance Tips for Each Life Stage
Following are focused tips to consumers based on their likely needs in different life stages. For example:
- Young singles who want to be sure that they can get life insurance later in their lives when they may develop health problems should consider purchasing term life insurance that is guaranteed to be renewable. They may also want to consider a term policy with a conversion option, which enables them to switch, for a set fee, to a cash-value policy at a time when they have more money. Those serving in the military should consider Serviceman’s Group Life Insurance, low cost term life insurance available to all those in active duty.
- Young families should consider purchasing life insurance for both spouses, even for a non-working spouse, to help pay for childcare and other domestic services. At this life stage, term insurance may be the most cost effective when their salaries are still relatively low and they’re paying off a mortgage. Some parents purchase small life insurance policies for their newborns to guarantee that they’ll have some insurance if they develop health problems.
- Established families should consider the probable costs of their children’s college education when determining how much life insurance they may need.
- Empty nesters/seniors should evaluate whether they can reduce their life insurance coverage based on such factors as whether their spouse is alive, their home is paid off, their children and/or grandchildren are financially independent, or if they anticipate high estate taxes that would be a burden on their heirs. Some older individuals with significant financial assets may choose to keep their life insurance in force because they view insurance as an estate-planning tool that enables them to leave their loved ones money that is exempt from income and estate taxes.