4 Stages of Life I Should Consider Life Insurance
Your need for life insurance grows as your life changes. Every milestone in your life increases your need for life insurance. Here are four stages of your life when you should consider life insurance:
When you decide to settle down and commit your life to another person your need for life insurance increases. As a couple you will share bills, buy a home, buy cars and ultimately incur a significant amount of debt. You become a team -- each one dependent on the other to pay the bills and survive. You become accustomed to the life you have built together as a couple. If you or your spouse were to suddenly pass away, the other one will instantly become the only person responsible for the debts. Life insurance makes it easier for the spouse to pay off the home, cars, other debts and funeral expenses. Your contribution to the family will still live on. Your spouse can grieve the loss without worrying about how the bills will get paid and whether or not they will be able to stay in the same home you shared together.
College can be interpreted in a couple of ways: If you go off to college or your child leaves for college. College is a large expense in someone's life. Students take out loans to cover the costs of their education. If you are the student, you want to make sure your college debts will be paid off if you were to pass away unexpectedly. If you are a parent with a child going to college and you have co-signed on a loan, your child will have the means to pay off their college loan debt if you were to pass away suddenly.
Birth of a Child
The birth of a child is an important time for life insurance for the child and the parents. Purchasing a small policy with a guaranteed insurability clause assures the child will be covered no matter what illnesses or unforeseen events may happen in their lives in the future. The benefits of insuring children are: the premium is the cheapest it will ever be, they are guaranteed coverage, and the policies build cash value that can be accessed for college or a first car.
If you are a parent having a child, you need extra life insurance to help your spouse if you were to suddenly pass away. Your child won't have to endure the financial hardships that single parenting may bring and their life can stay somewhat normal with the money you have left to take care of them when you are gone.
You are lucky if your job offers life insurance, but not enough people know what they have: What is the portability of your policy? What happens to the premiums when you retire? You want to be in control of what you own. Purchasing a final expense or burial policy when you are near retirement or 10 years after your independence day will help your family with immediate funeral expenses without them having to deal the an HR department at your old job.
The goal of life insurance is to protect the ones you leave behind. A conversation with your family or quick calculations of your expenses will reveal a need for life insurance you may not have expected.