Life Stage Insurance Planning
Different stages of your life are going to offer you a unique plan to make the most out of them. This refers to goals and traditional plans, of course, but it also refers to understanding life stage insurance planning as well. You can learn about the types of insurance you need at different stages in life to make sure that you are always prepared for anything that may come your way. It’s a common misconception that your life insurance planning just needs to be done once. In reality, you should always make sure that you keep an eye on your insurance needs at different parts of your life. That is, when something changes significantly in your life.
Life stages insurance needs do differ from person to person and situation to situation, but here is what you should know about insurance at various life stages.
Life stages in general
Keep in mind that the following life stages are not necessarily in the order in which they will appear. As well, not all of them will apply to you, depending on your life and its goals. That being said, insurance at various life stages — regardless of whether you plan the milestone in your future or not — is something to understand and be ready for, regardless.
- Single with no dependents: Often the first independent step into adulthood, when you find yourself out living on your own and you are free from a spouse or other dependents, it’s easy to think that you’ve got all of the time in the world to plan everything out. This often includes life stage insurance planning. Because you’re not at a particular life stage right now, right? Wrong, actually. Life insurance planning has a role in your life even if you are entirely independent. If something were to happen to you at this stage in your life, you would be leaving your debt to a co-signer or a family member. You would also be leaving your family responsible for covering end of life care for you, which no one wants to have to deal with. As such, you’ll want to make sure that you’ve got a life insurance policy in place, even if it’s just a really basic streamlined one.
- Running a business: Being self-employed means that you are going to have to put a lot of your own money into the business itself to get it off the ground and running. This means that you’ll also need to address the life stages insurance needs. After all, investing in a business that is doing changes the value of your business. The change in the value of the business means that you may need to bump up the insurance coverage that you have so that you have all needs covered if something were to happen. This is especially important if you have real estate or a co-signer within the business.
- Buying a home: It’s exciting to buy a home, but you’ll find that your life stages insurance needs also change. You’ll want to offer mortgage protection — a payoff option if something were to happen to you — as well as the potential for utilities and other expense payments for loved ones that you may leave behind. There are a series of options available to you at this stage, so you can find the right one for you and your expectations.
- Getting married: When you get married, your financial journey becomes a shared one with a loved one. You may need to address your life insurance to make sure that it is at the right amounts if something where to happen to either of you. You may also want to consider a joint life insurance policy, depending on the situation. This is a decision that will impact both of you, but can still involve your own separate plans if you choose to keep them separate and not joint.
- Having kids: The types of insurance you need at different stages in life starts to branch out when you have kids. Since they are dependents, you’ll want to make sure that you’ve got proper coverage for them, their futures and your home, should anything happen to you. One way that you can look at this is if you are looking at a policy centered around college education. You can plan for their future financially so that they can choose what to do with it if anything were to happen to you. Knowing that your kids are protected financially can be a huge weight off your chest. The policy could even change as they grow up and move out. Once you become empty nesters, you may find that you want to start focusing more on the estate planning option, since your dependents are no longer dependents. This is another life stage that you’ll want to plan out carefully with someone to guide you.
- Getting a divorce: In the event of getting a divorce, your life stage will adjust and shift. Both beneficiary and coverage are often going to change when you make the decision to part ways, so you’ll want to make sure that your plan is more appropriate to the needs that you have a divorced individual. You can also shift the coverage for your children, too, depending on their ages, the situation of the divorce, and what their (and your) needs are going to be. In this case, you would be back to being a single person, but you would have dependents to consider, so your needs won’t be quite the same as they were before.
- Retirement: When the time comes for you to make it to retirement, you’ll want to take another look at the insurance policy that you have in place to make sure that you are focusing on the right details. For instance, instead of coverage for your home and dependents, you can start looking at cashing in the actual cash value of your policy to help you pay for the your regular expenses that a retirement income just doesn’t cover. Insurance at various life stages continues to shift at retirement, even if it is often thought that this is the last stage in a life.
Understanding where you are in life is important to making sure that you can face each life stage without fear or concern. You simply need to make sure that you factor your life insurance into the equation so that you are prepared for everything that you could ask for.
It’s helpful that life insurance planning happens to line up with most of the large milestones in your life. In this way, you’ll be able to take life stage insurance planning seriously and, of course, take care of the life stages insurance needs that you have even as they change and shift — both planned changes and unplanned ones. Being prepared for anything that comes your way is a great way to make sure that you can stay in control of your life. By understanding and being ready for the types of insurance you need at different stages in life, you’ll be arming yourself for a profitable and enjoyable future that is going to be nothing but the best. Planning really is the way to get there.
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