Best Life Insurance by Age
March 30, 2009 |
Featured
As you grow older and your life circumstances change, your insurance needs change as well. Everyone’s needs are unique, so the following tips are just guidelines. Before signing up for life insurance you should always get financial advice first to make sure that your coverage is adequate.
There are two major types of life insurance. Permanent Life Insurance lasts from the time you sign up for the policy until you die. The premiums do not change over the life of your insurance policy. The amount of the premium is determined by several factors at the time you take out the policy such as your age, health conditions, and your job as well as any risks associated with it.
Term Life Insurance is a policy that is only for a specific period of time. Insurance companies offer different term periods for policies of five, ten, twenty and third years. Term insurance is commonly purchased when some has a mortgage or other large loan that needs to be covered. Another common use for term life insurance is parents who take out a policy when their children are young.
Here are a few scenarios to help you determine which type of insurance is best for you.
Scenario One. Early twenties. No Debt. Single or Partnered.
In this scenario, there is a good change you won't need any insurance. If you should die, there is no debt that your family or other loved ones will be responsible for and you don't have any dependents. However, if you have a partner who relies on your income for his or her support then you may still need life insurance. If your partner is a student or has a temporary need for support you might want to take out a term life insurance policy.
Scenario Two. Early to Late Twenties. Children and/or Debt. Single or Partnered.
Once you have a large loan or children, it is very important that you get life insurance coverage. You don’t want to leave young children without adequate support in case of your untimely death. You may want to consider a term life insurance policy that covers either the time frame of your mortgage or other loan, or a term of twenty years or so that will cover your children until they are finished with college.
If you plan to have multiple children over time, a permanent life insurance policy might be a better option. Term life insurance policies usually have a maximum term of thirty years.
Scenario 3. Early forties to late fifties. Children and/or Debt. Single or Partnered.
At this age, if you do not have debt a small permanent life insurance policy might be something to consider. This could cover funeral, legal and other expenses or emergencies should you die. You may also want to add enough coverage for your children’s education and other support, depending on their ages. A term life insurance policy is something to consider if you have a mortgage or other large debt along with a small permanent life insurance policy.
Scenario 4 Retired with no debt.
At this point in your life, a small permanent life insurance policy covering funeral expenses, legal costs, and other emergencies would be beneficial. You may also want to include an amount to provide for beneficiaries.
These scenarios are just guidelines. Your life situation may not quite fit any of them. It is critical that you determine the exact financial needs that your family would have if you were to die an untimely death. You should talk to a financial planner or advisers to ensure that you have adequate life insurance coverage.
Tags: best life insurance, life insurance age chart, life insurance by age
