Life Insurance Through the Ages

One of the biggest decisions everyone seems to put off (besides financial planning) is the planning and purchase of life insurance.  A comprehensive plan to provide against the unimaginable death of a loved one, is a simple but necessary process to complete.

Below are a few ideas surrounding the strategy and purchase of insurance by different age groups.  Please keep in mind that for each age category, we offer many different types of insurance to fit specific needs and situations!

Children & Teenagers
Children and Teenagers do not have the debt or responsibilities of an adult or parent.  While the initial needs for insurance are few,  for parents and grandparents, this is a great time to start policies for their children or grandchildren.  Purchasing life insurance for children have the following benefits:

Guaranteed Insurability – Once insured, a covered child can purchase additional coverage without having to prove health status again.  Policies will dictate the timing of additions to coverage.  For families with some type of history of early onset diseases, this is a key reason to start a policy at this age.

Cost – The younger you start an insurance policy, the less it costs.  The costs for a 30 year policy can be as low as $20/month for $500K of coverage.  The coverage starts at a low cost and remains at this low cost throughout the life of the policy.

Student Loan Relief – This is a changing issue that always needs to be highlighted – but rarely is addressed directly.  If the borrower passes, Federal Student Loans can be dismissed.  Unfortunately, with private loans, the remaining debt comes from the estate.  The bottom line is that with the ever increasing expenses of college or post education training, student loan debt can be covered for a short period of time at very little cost.

Time for Grief and Recovery – One little discussed issue is the devastation of a child’s death.  Having a policy can provide the surviving family members time for the proper recovery from a financial standpoint.  Extra time off from work and counseling are key points to consider in this situation.

Funeral Costs – I will only touch on this once since it applies for any age range.  Typical funeral expenses now can reach over $8,000.  In any situation, many do not have this money free at the time of a tragedy.

In Your 20s
The best time to buy insurance is in your 20s!  The costs for all types of life insurance are at their best rates during this time of your life.  The problem is that because you are busy and healthy, most feel it is not needed at this time!

Guaranteed Insurability – As you are probably healthy in your 20s, this is a great time to get insurance with the option to buy additional coverage later in life.

Mortgage and Education Costs – Having insurance coverage for two of your largest costs makes good sense.  A 30-year policy can cover the costs of the mortgage and your children’s education through college!  We like to call this mortgage insurance or education insurance!

Income Protection – Many customers mistakenly feel that life insurance from work is a good start with protecting their families.  The problem with this is that work provided insurance only covers 2-3 times annual income.  This is not even close for paying for education or an outstanding mortgage.  Keep in mind at this age you may still  have student loan debt to repay.  Additionally, if you leave your employer you will lose this employer-provided coverage. Keep in mind, your insurance needs may reach 10 times the policy holder's salary especially if your spouse does not work.

In Your 30s
For this decade of your life, your profile probably includes children, a mortgage, a couple of cars and many different bills!  This is now a crucial time to assess your insurance needs based on your growing responsibilities.

Income Protection, Mortgage and Education Costs – You still have the same issues as in your 20s!  Only now the stakes are increased as there is a greater likelihood for stay-at-home spouses, child care costs and the need for a financial cushion in case the worst happens.   As your income increases, your need for protection is even greater!

Guaranteed Insurability – As you age, your chances of staying healthy diminish.  High cholesterol/blood pressure only add to your cost of coverage.  The sooner you get insurance, the better your chances are of locking in the lowest possible rates.  Having any kind of family history of disease or cancer only makes the necessity of getting life insurance that much more important.

In Your 40s
For this decade of your life, this is not the best time to start a new comprehensive policy.  As you age from your 40s to 50s, insurance costs rapidly increase!

If you have existing standalone insurance (not from work) now is a great time to evaluate your current insurance coverage.  Because we are living longer, the addition of another policy or adding to an existing policy may be in order.  Many of the policies we sell have options to purchase additional coverage during this period of time!

Insurance Costs – If your life insurance costs are too expensive, talk with your insurance provider about either shortening the term or lowering the level of coverage.  Some policies have this option during the life of the policy.

Income Protection, Mortgage and Education Costs – Same issues as in your 30’s!  But now the stakes continue to increase as there is a greater likelihood for stay-at-home spouses, care for aging parents, possibly continued child-care costs, possibly secondary education costs and the need for a financial cushion in case the worst happens.   As your income increases, your need for protection is even greater!

Guaranteed Insurability – As you age, your chances of staying healthy diminish.  High cholesterol/blood pressure/cancer/diabetes only add to your costs of coverage.  The sooner you get insurance, the better your chances of locking in the lowest possible rates.  Having any kind of family history of disease or cancer only makes the necessity of getting life insurance that much more important.

In Your 50s
Buying insurance in your 50s is not cheap.  The costs are now roughly 5 times what the insurance would have cost you while you were in your 20s.  At the same time, having insurance for the first time now gives you piece of mind as you age!

Mortgage and Education Costs – Hopefully during this time period, your exposure to these costs are drawing to a close. 

Income Protection – Hopefully your income has continued to increase from your 40s.  As other responsibilities lessen, the focus now is income replacement for your surviving spouse’s retirement.

Legacy Consideration – Depending on your financial situation, your life insurance policy can also be considered as a gift to your beneficiaries.  Your financial advisor and insurance provider can help you map out this strategy and it's tax implications.

Medical Bills – Many different types of insurance have options to payout a % of the face value for critical care or terminal illnesses.  This is a very important consideration especially with any major family history illness or cancer issues.

Final Expenses – If the cost of this issue is a concern, there are many policies that are available during this time frame to cover this type of expense in a cost-effective manner.

In Your 60s and Beyond
In a perfect situation your retirement strategy and life insurance coverage is established for your surviving spouse and other beneficiaries.  If your debts are largely paid, your retirement is set and you have no financially dependent children, your actual need for life insurance is minimal except for legacy concerns.  Once again, any decision to do this should be in consultation with your financial advisor and insurance provider.

The Bottom Line
Regardless of age, if you have family that relies on your income, a life insurance policy ensures that your family can maintain their standard of living after your death.  It is the one final gift of love that you can give to your family.  The younger you make this decision, the lower your cost is to obtain life insurance.

Within the Rose Insurance Agency, we have a dedicated specialist who can work with you to make the correct life insurance decisions that allow you flexibility to make changes as your situation changes!

We look forward to discussing this with you when the time is right!  Schedule a time with our specialist to get an idea of which options will meet your needs at 770.664.0602!


Resources: 
https://www.healthmarkets.com/resources/life-insurance/life-insurance-for-teenagers/
https://havenlife.com/blog/choosing-the-right-life-insurance-by-age/