- Key life events to review life insurance needs
- June 16, 2015
Throughout our lives, we face numerous life-changing decisions that make us question our current life insurance situation. Should I have a policy? And if I do, do I have too much or too little coverage?
Unfortunately, life insurance tends to take the back burner during major life events and we’re sometimes too busy or preoccupied to worry about a policy. But as ironically, it’s during these times that we need insurance most.
If you are in your 20s, life insurance may be the last thing on your mind. You’ve got your whole life to live, I know. But it’s important to realize that life insurance rates are the lowest when you are young and healthy, and buying now allows you to lock into a low premium for years to come.
To put this into perspective, a 10-year term life insurance policy with a face value of 250,000 dollars for a 25-year old non-smoking would cost approximately 15 dollars per month. For a female non-smoker, it would only cost 11 dollars per month.
Your 30s are a decade spent getting married, starting a family, buying a home and establishing job security. Taking on a lot of new responsibilities means it’s important to start planning for “what if” scenarios. Now is a good time to either purchase life insurance or increase coverage to cover new needs with the ultimate goal of financially protecting our loved ones, in case something were to happen to you. How much coverage should you have? Insurance industry professionals suggest that you have five to 10 times your annual, pre-tax salary in life insurance protection.
By the time you are in your 40s, your family may be well-established, your debt will hopefully be managed and your mortgage may be paid off (or almost paid off). In addition to using your policy to cover the basics (e.g., debt coverage, educational costs and funeral costs), you should consider using your life insurance policy as an investment tool for long-term growth.
In your 50s and 60s, reasons for owning life insurance shift towards leaving a legacy, estate planning and retirement planning. A life insurance policy gives you peace of mind knowing that your loved ones are financially protected when you pass away.
If life is moving fast and you’re looking out for the future of your family, life insurance experts recommend reviewing your life insurance needs when the following life-changing events occur: getting married, having a baby, buying a house, starting a new job, getting a divorce, death of a loved one, etc.
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