Most people think life insurance is just for those who are young, since someone who is older will most likely not have kids to take care of. Life insurance is a vital part of any financial plan, so it is important to have it at every stage of life. Many people do not know how much coverage they actually need or forget to modify their plan as their life changes, which can cause big problems down the road as you age and start a family.
Life insurance rates have fallen significantly over the past decade and the entire process has gotten a lot simpler, so take the time to sit down and decide how much coverage you need.
Anyone who has someone who depends on them in a financial sense should have life insurance. Those who are married with families need it because if a spouse passes away, life insurance can go a long way towards helping a family with kids. A lot of people with kids do not have enough life insurance, or might not even have a policy at all. For those with small kids, having life insurance is one of the most important decisions a parent could make.
People can use an insurance calculator to figure out how much insurance they will need to account for the needs of kids. Whatever you do, do not try to be cheap with life insurance. Round up any figures and be generous with your projections.
Younger people should always opt for term life insurance because it is simple and easy to understand. Doing a price comparison between different policies is a breeze.
Even parents who do not have any sort of income need life insurance because they will have to cover childcare expenses if the other spouse passes away. A good policy can make it possible for someone to work part time and still be able to give time to their kids and family.
If you are not able to afford a long-term policy, choosing to ladder coverage is a better option than just skipping out on insurance. 20 or 30-year policies are good for those who plan to work for several decades or want to have a lot of kids. Always make sure to opt for the higher insurance amounts if possible.
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If your income grows, you might need more coverage. It’s usually best to sit down and review coverage every five years or when you have a big life event such as a new child, a new job, or a divorce. Premiums will still be a relatively good price if you are healthy, even if you are older. Plus, you might need insurance for just a few more years if your kids are teenagers and getting older. This also gives you the option to buy a whole life policy to serve as another good investment opportunity if you have maxed out other vehicles such as an IRA or 401k.
Those who are empty nesters still need some sort of life insurance. It can help another spouse pay the bills and have some money for retirement if the other spouse passes away. Insurance here can be used as a gap for those who are saving for retirement. Those who retire generally do not need life insurance anymore because they have enough assets to live off of in retirement, so you can just drop a term policy once the term ends.
Do you have a question about life insurance? Click here to contact Davco Insurance today!
Courtesy of Cuselleration