As you age into middle age, it is possible to have more obligations. Generation X is responsible for many of the same responsibilities as previous generations. These include marriage, children, a mortgage and home insurance. Generation X, which was born between 1965 and 1981 is one group that might be more concerned about the need to have life Insurance.
Corinne Kligmann (a partner at Utah’s Lift Financial) says that “Gen X is in great need of life insurance.” Many are supporting their grown children or helping elderly parents. Many don’t think they will have any Social Security. The financial crisis has caused Gen X-ers to lose a lot of their net worth over the past five years. This has put a lot of pressure on the generation. However, it is possible to reduce this by adding life insurance planning.
Andrea Woroch is a family finance expert who also contributes to the on-air show. She describes the effects that life insurance policies can have on your family’s financial health. She explains that any type of debt can be a financial burden on your family, your spouse, your children or your parents. These debts can be resolved by life insurance in the event you die unexpectedly. This will ensure that they are not passed on to your loved ones.
Jordan Shanbrom is an experienced life insurance broker at California Life Coverage. He explains in detail how life insurance can help Gen X-ers. He says that most Gen X-ers are still working adults and provide for their spouses or their adolescent kids. “If the Gen X-er who is working dies, it will result in a loss of income. Many Gen X-ers are homeowners. If their spouse or children have to pay a mortgage, the house is lost. It is essential to have at least 5 years’ income replacement through life insurance.
Everyone has different needs when it comes to Life Insurance. When searching for life insurance, Generation X may have a set of considerations they want to make.
Life insurance is important for Gen Xers
Generation X is entering a phase of their lives that involves many responsibilities. You may be able to have peace of mind knowing that your loved ones will be taken good care of in the event you are unable to work.
Kligmann’s analysis is based on her experiences working with Gen X clients. She shares that Generation X is a generation who understands the importance of hard work and is skilled with technology. They also have some experience levels that provide wisdom and a desire for work-family harmony.
Gen X may not be doing well in many areas of their lives, but they could be behind in life insurance. Klingmann says that life insurance is one area where they seem to be lacking. They have been busy building their families and careers, but it seems they have missed the memo that would have helped them to understand the importance of life insurance. Many of them have also delayed or ignored this part of their financial planning.
“Most people wait until their 40s or 50s to start thinking about life insurance,” says Travis Price a Medicare and final expense agent. This is the time when an average person starts having health problems. The’middle age’ period causes sharper increases in life-insurance premiums.
This is a concern because life insurance for Generation X could provide a variety of benefits to your loved ones. Life insurance can help your family if you are unable to work.
- Mortgage payments: A life insurance policy may help your family pay the monthly mortgage payments if you die.
- Daily expenses: If you are unable to work, your death benefit from life insurance could pay your beneficiaries.
- Education: Higher education can be expensive. Your life insurance policy can help pay for college and may even replace student loans.
Dr. Jeremy Britton is the CFO of BostonCoin. He offers his advice. He explains that insurance may seem like a “necessary evil”, but it is a cost of protecting your income if you are sick or your family’s income if your death. You may not want to use it like any other insurance, but you can still get it if you do. It may give your family and you some tax deductions.
Types of life insurance available to Gen Xers
Gen X may have different life insurance requirements. There are many types of life insurance that can help Gen X-ers achieve their financial goals. There are many factors that you should consider when deciding which type of life insurance is best for you.
Shanbrom says that Gen Xers with great financial status should get a simple term to avoid taxes when they transfer wealth to their children. This is especially important if their family history includes a high rate of early death. If their genes indicate they will live to be 80, they should consider getting permanent life insurance that will pay their loved ones when they die.
Term life insurance
Term insurance can be a temporary type of life insurance. It can last anywhere from 10-30 years depending on which policy you choose. The premium for renewal is possible, but it will be based on your age. This means that your price may rise as you age.
Woroch shares that a term life insurance policy is able to cover your family’s tuition, college, and bills. “But it can also ensure that your elderly parents receive the care they require when you’re not there.”
Whole life insurance is not like term life insurance. Your whole life insurance policy is a type of permanent insurance. It will not expire so long as you continue to make the required payments.
You can also accumulate cash value with whole life insurance, which is something that term life insurance doesn’t offer. Many Gen Xers love cash value because it allows them to borrow against their policy and withdraw money without having to repay it. However, your death benefit may be reduced.
Final expense insurance
A final expense insurance is another option for Gen Xers. These policies are small, whole-life policies with death benefits typically around $25,000 that are intended to cover end-of-life costs. Final expense policies don’t require medical examinations and can be a great option if you are unable to get other types of life insurance because of health issues.
Life insurance for Gen Xers
A standard policy might not be sufficient to meet your life insurance needs, no matter which type you choose. Life insurance riders are here to help. A life insurance rider can be an addition to your existing life insurance policy. It adds additional protections that may better suit your family’s requirements.
Price explains that life insurance riders are contractual modifications to a standard life insurance contract. They may increase benefits in the event of a particular event.
Gen Xers may be interested in a variety of life insurance riders.
Premium rider with disability waiver
In the event that you are disabled, a waiver or disability premium rider may be available to protect you. Your premium payments may be waived if you have this option and are unable to work due to a qualifying disability.
Rider for Accelerated Death Benefit
A rider allowing you to receive part of your policy’s death benefits while you are alive may be an option. This rider can be attached to your policy and you could receive a portion of your death benefit in the event that you are diagnosed with terminal illness.
Long-term care rider
You may be able to access your life insurance benefits earlier than expected by adding a long term care (LTC), rider. This rider can be added to your life insurance policy to allow you to access the funds for long-term medical care.
Questions frequently asked
Which is the best life insurer for Generation X?
The best life insurance company is available to Gen Xers. However, it will depend on your personal rating factors such as your age, health, and budget as well as the type of policy and riders that you are interested. You can find the right company by working with an agent or comparing quotes from multiple companies. You may be able to adjust your current life insurance to better suit your needs.
What is the cost of life insurance for Gen Xers?
Each person’s life insurance costs will vary. Life insurance companies calculate premiums based on a variety of individual rating factors. How much you pay can be affected by factors such as your age and current health. The type of life insurance policy you select will affect the pricing. Permanent policies are generally more expensive than term policies.
What amount of life insurance do you need?
The amount you need in life insurance depends on the care you want for your family after you pass away. Consider whether you simply want your loved ones able to pay for your funeral, or if your policy will provide enough money to pay off any debts or make a financial gift.
Dr. Britton suggests that you use the annual income calculation to determine your retirement income. Paying off existing debt won’t be enough if you have dependent children or a partner who rely on you for their income over the next 20-30 year. You need to think about future debts, such as college costs, school expenses, and grocery shopping in 2045.