Knowing When It’s Time to Get Life Insurance


Life insurance. It’s not a fun thing to think about, nor is it a fun thing to purchase, but it is crucial if you want to successfully plan for a solid financial future for your family.

“A life insurance policy is a pact between you and the insurance company,” according to Matt Krantz of USA Today Money. “As long as you pay the bill, or premium, the company will be there to pay a death benefit to your beneficiaries if you pass away, giving them cash to get by.”

There are three times in a person’s life when obtaining a life insurance policy should be considered — the need comes in three waves, if you will. Read on for details.So you see why obtaining life insurance is so vital? Yes, it is costly and complicated, but it is well worth the effort. There are three times in a person’s life when obtaining a life insurance policy should be considered — the need comes in three waves, if you will. Read on for details.

Age 25-35

This time frame is when obtaining life insurance is most crucial. It just so happens that this is the stage of life during which obligations and new responsibilities are at their height. Despite that drawback, the fact that you are still building your assets at this point makes life insurance all the more necessary — if there was a disruption of income, could your family still cover costs? That’s why a policy is important at this point.

On the other hand, because you are young and the chances of having to cash in this policy are relatively low, premiums are usually more reasonable than they would be at a later stage of life.

“For young people, term insurance is a very cheap and very cost-effective way to take away risk,” says certified financial planner John Hauserman to USA Today.

Age 35-55

Life insurance is less critical throughout these years, as people’s liabilities are shrinking while assets are growing. Still, term policies should remain in place, as there is still a need for life insurance at this point. Maybe you have a child later in life or want to start thinking about your grandkids’ financial security — protection is important in all cases.

Age 55 and up

At this point in life, life insurance turns into something else entirely. It is no longer needed for protection, as expenses are relatively low; instead, long-term care is more of a concern. Medical costs may rise during this time of life, so a change in policy might be worth looking into.
At the same time, some people opt to cash in their life insurance policies postretirement, if they did not save enough during the preretirement years. While this is not a recommended fallback for retirement planning, the option is still there.

With some basic information and a little early planning, life insurance can go from a scary topic to a small piece that succinctly fits into an overall financial puzzle.

 

Now that you know the basics on when you should get life insurance, have you thought about home insurance? Find out more in “Homeowners Insurance: What Does it Cover?

 

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