Young or old, how much life insurance do you need throughout life? Your life insurance needs will change as you hit different life stages. It’s a good idea to meet with your agent regularly to ensure there are no gaps in coverage. Here’s a look at different life stages and how life insurance plays a role.
In Your 20s
So you’ve entered the “real world” — have your first job, a place of your own and are financially independent. In your 20s, life insurance may be the last thing on your mind. You probably know you’ll need it — someday. But one of the biggest misconceptions about life insurance is that you don’t need it when you’re young and single. Not true. You may want to buy a policy now if you:
- Gotten married
- Begun having children
- Provide financial support to a parent and/or spouse
- Have private debt, like student loans, car loans or a mortgage
A life insurance policy can help cover debts that could be left to a co-signer or next of kin. Buying life insurance when you’re young and healthy can also mean lower premiums.
In Your 30s
Now that you’re in your 30s, you’ve probably experienced one, two or five “big” life changes. Whether you got married, started a family, landed a fancy new job or bought a house, these are all big changes and you’ll want to make sure your life insurance is keeping up.
- New job: Starting a new career may not seem like something you need to consider when you’re evaluating your life insurance needs, but often new jobs come with a salary change which can change the amount of income replacement you’d need if something were to happen.
- Children: The need for life insurance especially increases with children because you naturally want to ensure your family will be taken care of should the worst happen. Life insurance can cover funeral costs and provide income to pay expenses after you’re gone.
- Buying a home: According to a survey by the National Association of Realtors, the median age for first-time homebuyers was 32. Buying a home is exciting, but can be a big expense. If something should happen, you’ll want to be sure your family can stay in their home.
In Your 40s
As your career has become more established, your income has likely increased compared to what you were earning in your 20s and 30s. When your income grows, it’s a good idea to look at your life insurance coverage to make sure it will provide protection that keeps pace with your lifestyle.
However, not all life changes call for increasing your life insurance. If you’ve paid off debts — car loans, mortgage, private loans — or your children have moved out, your life insurance coverage can likely be adjusted. You may be ready to switch from a term to a permanent life insurance policy now. An agent can help you understand what might work best for you.
As you get closer to retirement, your life insurance needs continue to evolve. Now may be a good time to consider a Daily Living Rider. While it should not be viewed as a replacement for long-term care or disability insurance, a Daily Living Rider can allow you to receive a portion of your policy’s death benefit as a way to provide some financial support if you become chronically ill or are unable to perform two of five essential tasks of daily living — eating, toileting, transferring, bathing, dressing and/or continence.
On the other hand, if you’re debt-free, no longer working and your children are financially independent, you may be able to reduce your coverage.
We Can Help!
As your world changes, your life insurance should change with it. Your local Rural Mutual agent can help you ensure you have the right coverage, no matter what your stage of life.
*Life insurance and annuity products offered through Farm Bureau Life Insurance Company. See your Rural Mutual agent for more info about these products.