Protecting your loved ones has always been important. This is even more so now that the COVID-19 global pandemic continues its devastation of households and raises the question about mortality. Although life insurance is not a topic that sparks conversation at dinner, it can be a crucial stepping stone to financial security.
Life insurance is a financial tool that can be used to benefit you at any age. It’s not just for times of uncertainty. Life insurance is more than just a tool to provide survivorship benefits. It’s a dynamic tool that can be used throughout your life, alongside your savings and investment strategies.
According to LIMRA, an organization that provides financial services research and consultancy, 59% of Americans do not have life insurance. And, about half of them are uninsured. According to LIMRA’s 2019 Insurance Barometer Study, life insurance is often among the lowest priorities for millennials or Gen Xers.
Here are some ways life insurance can benefit you at different stages of your life.
Financial success in your 20s
When you are just beginning your career, it can be daunting to enter the workforce and plan for the future. A good financial plan should include investments such as an IRA or 401(k), along with life insurance to protect your savings and pay off debts. Life insurance is something you should consider, even if your spouse or children are not involved. If you have co-signed student loans with your parents, or if your parents are unable to pay your long-term care costs, or if your business is just starting out, life insurance might be something you should consider.
Life changes in your 30s
These life events are more likely to occur in your 30s, such as getting married, purchasing a house, having kids, and seeking promotions. These changes are more likely to occur in your 30s, making it even more important to establish financial health to help cover future costs and build financial security. These changes require additional protection, especially at an age where life insurance is still very affordable. Many people start families in this decade. While expectant parents may feel financially stressed, it is important to consider how life insurance can help protect a young family as well as provide financial security.
You may need to make some alterations in your 40s
What about those clothes you wore in 20s? They won’t fit you in your 40s unless you make some adjustments. The same goes for your financial plan. Your goals as a young adult have likely changed over the years. This is the time to assess your savings and determine if you have enough life insurance. According to the National Association of Insurance Commissioners (NAIC), people over 50 often ignore their insurance policies. It is important to review your coverage periodically to ensure that it changes with your family and financial situation.
Looking for the prize in your 50s or early 60s?
Many people in this age group are retired, their kids have grown up, the house has been paid off, and the future looks bright. However, this is not true for everyone. Others might have children later in life, while others may have worked multiple jobs over their career, or might be dealing with health issues. These and other factors can make it difficult to save and invest. There are also many options for life insurance that can be used for business succession, income replacement, estate tax payment, or retirement income replacement.
65+: Goals have been changed
When people turn 65, the financial plan that was established in youth should continue to yield benefits. With so many unpredictable changes in life, financial plans should still be in place. These plans should include retirement income, full-time and part-time income, as well as Social Security benefits. A financial strategy that includes life insurance can include protection for surviving beneficiaries against any debts, estate taxes, funeral and burial expenses, and life insurance can be a part of it.
Although the COVID-19 pandemic has brought life insurance to the forefront, it is still vital. No matter where you are on your financial wellness journey, whether you’re just starting or approaching retirement, life insurance can be a valuable part of a comprehensive financial plan.
