Life insurance for different life stages

Life insurance is unique in the insurance world. More than a safeguard in case of an accident, it exists to help with planning financial futures. It can’t repair a house after a fire, but it can protect the future of your loved ones. Many people believe that life insurance is only for certain types of people – elderly, rich, parents, etc. – but that couldn’t be further from the truth. Whether you're just starting in your career, raising a family or enjoying retirement, life insurance is for you. Life insurance for different life stages might look different, but the underlying need stays with you through your life.

Knowing when to get life insurance and how much coverage to carry can be overwhelming though. That’s where this guide comes in. Regardless of where you are on life's journey, understanding the unique considerations and benefits of life insurance can empower you to make informed decisions for your future and your family.

Young adults (single)

Many young adults think that life insurance is for other people – for people with significant assets or dependents. This mindset leads to many people missing out on important benefits; there are many benefits to life insurance for people of all ages with all levels of assets.

The reality is that unforeseen circumstances can strike at any time, even to young and healthy people. Young adults have more financial obligations than they may think. Student loan debt, final expenses and even supporting aging family members can all be helped by having a life insurance policy.

Term life insurance is among the best life insurance for young adults. This coverage is for a specified period of time, typically without large premium rates.

Getting married

Marriage can bring many changes, including new financial plans. As couples become legally entwined, their finances do too. Whether a couple relies on one income or two (or more!), losing an income can bring huge financial strain to the remaining family. Life insurance needs after marriage are a bit different than those from before marriage.

One option to consider is a joint life insurance policy. Unlike individual policies, which provide coverage for each spouse separately, a joint policy covers both individuals under a single policy. This can simplify the insurance purchasing and claims processes and may result in lower premiums compared to purchasing separate policies.

However, this isn’t the right choice for every couple. Choosing between individual and joint life insurance policies requires careful consideration of various factors.

• Individual policies offer more flexibility and customization, allowing each spouse to tailor coverage to specific needs and circumstances.
• Joint policies provide shared coverage but may present limitations if the couple's needs diverge in the future, including divorce or a change in one spouse's health status.

When deciding between individual and joint policies, couples should weigh factors such as their combined income, existing financial obligations, children (or plans for them) and overall budget.

Starting a family

Children may fill a home with love, but they can also fill it with worries for the future. As families welcome new children, protecting their financial future becomes a priority. Life insurance operates as a safety net, providing peace of mind that they will be protected no matter what happens to their parents.

Calculating the right amount of coverage is essential for families with young children. In addition to replacing lost income, coverage should also account for future expenses such as education and childcare.

Life insurance for single parents may even be more important than life insurance for married couples. Losing a single parent’s income is more detrimental to the surviving children than losing a portion of a household’s income.

Empty nesters & pre-retirement

As children become independent and move out of the family home, the life insurance needs for empty nesters and pre-retirees shift. With fewer financial responsibilities tied to supporting dependents, the focus often becomes optimizing financial resources for retirement and financial security during the pre-retirement years.

The death benefit is key for this group. One common use is to supplement retirement income, providing an additional source of funds for use in retirement. It can also pay off remaining mortgage debt.

Universal life insurance is a flexible option for empty nesters and pre-retirees seeking both protection and potential cash value accumulation. Unlike term life insurance, which provides coverage for a specified period, universal life insurance offers permanent coverage combined with a cash value component that accumulates over time. This cash value can be accessed during the policyholder's lifetime, providing a valuable source of supplemental income or funding for various financial needs.

Retirement

As people transition into retirement, their life insurance needs often change. Retirees with sufficient retirement savings in place may find that their need for traditional life insurance decreases. Instead, their focus becomes preserving wealth, managing potential estate taxes and providing financial security for surviving spouses or beneficiaries.

However, some life insurance policies offer innovative features that can provide additional income during retirement. Annuity riders, for example, allow policyholders to convert a portion of their death benefit into a stream of guaranteed income payments, supplementing other sources of retirement income.

Retirees may also want to consider long-term care insurance as part of their overall financial plan. Long-term care insurance helps cover the costs associated with extended care services, such as nursing home care or in-home assistance, which can quickly deplete retirement savings. By adding long-term care insurance to their retirement strategy, retirees can protect their assets and preserve their financial independence in the face of potential healthcare expenses.

From the early years of independence to the golden years of retirement, the role of life insurance evolves to meet the changing needs of individuals and families. Whatever your current life stage, we encourage you to learn about your options and make a plan to protect your financial future. The VIU by HUB Advisory Team can work with you to assess your circumstances and goals and help you decide what life insurance options are right for you.