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What Life Insurance do You Need? A Solution for Every Stage

Life insurance protects our loved ones in case of our death. Although many people think of this type of coverage as something that a family breadwinner will need to have when they have people that depend on them, you may need a policy at other stages of your life as well. Here are some things that you may want to think about when considering how much protection you require.

Childhood Considerations

As a child, your life insurance needs are minimal. You probably won't even concern yourself with this type of coverage. However, if you are a parent, you may want to have some level of coverage on your child. If your child were to die, you would be left with funeral costs, and perhaps some final medical expenses. For this reason, you may want to have a small amount of coverage, or have a child rider put on your adult policy. If you have a little extra money, you may want to purchase a policy that would protect your son or daughter in case they come down with a chronic illness and are not insurable later, but it is not necessary.

Considerations for Young Couples and Families

As you get older and enter young adulthood, your need for a policy grows. As a single adult, you still only require enough protection to cover funeral expenses, but when you get married and have offspring, there will be people depending on you that need you to be insured.

Even if you work inside the home and do not earn an income, any child care, house cleaning, and errand running that you provide would have to be replaced, and insurance could provide the funds to make it easier for family members left behind. Of course, if you bring in an income that your family depends on to pay the rent or mortgage, having a plan will keep your family from losing their homes at a time when they are least likely to be able to cope.

Considerations for Later

As the kids grow up and leave home, your needs will be fewer. There will be no college funds to pay for. You will pay off your mortgage. You may even have a large retirement fund built up. If you are no longer working and are living off retirement, you won't have an income to replace. You might only want enough protection to pay for funeral costs and final expenses. If you have built up a large enough savings, you might not even require a plan at all. Some older adults purchase a policy as an estate-planning tool, as they may want to leave a business to one child, but don't want to leave another one out. Another reason some older people purchase life insurance is to help pay for taxes on their estate. You would want to talk to an estate planner in order to find out how to use a policy in this way.