Our lives are marked by milestones. High school graduations, 30th birthdays, weddings, home purchases – the major moments often represent transitions between different stages of life. As you move through your life, and as the milestones change, your needs change too. Want to keep moving forward with the financial means to meet those needs? You’re going to want to consider adjusting your insurance coverage as you go. Of course, your specific life path and timetable will affect the type and timing of your insurance coverage. Some insurance types, like health and auto, are consistently important at any age. But other types of protection are more suited to different stages.
Early Adulthood (Teens and 20s)
Protecting your future is the key element of a good insurance strategy for a young adult just starting out. Time is your greatest asset at this stage of life, when you have decades of earning potential ahead of you. Disability insurance is important to consider when you’re starting your career. It provides a safety net should the unexpected happen and an injury or illness leaves you unable to work. Disability insurance may not be available to people who are already sick or injured, so this isn’t a decision you can put off until something happens.
Young workers who are single and have no dependents may not need life insurance. If you rent your home, your home insurance needs should be pretty limited; renter’s insurance may cover them.
Starting a Family
Some people start building a family in their 20s; others don’t take this monumental step until their 40s or beyond. Whatever the timing, getting married or becoming a parent for the first time will immediately change your insurance needs. If you don’t already have life insurance, you’ll want to get it when you first reach one of these milestones. Life insurance will afford your spouse financial stability if you die unexpectedly. That’s especially important if your spouse relies on your income to pay the bills.
If you already have life insurance when your first child is born, that may be the time to increase your coverage and/or to adjust your partner’s coverage.
Middle Age (30s, 40s and 50s)
During your 20s, you can take chances and be flexible. The next several decades are all about putting down roots and building the life and career you want. That stability comes with its own challenges. If you buy a house, you’ll need homeowners insurance and additional liability insurance to protect you if someone is injured on your property.
This is also the phase of life during which to start thinking about long-term care insurance. If you’re ever in a position to need long-term care in a nursing home or similar facility, paying out of pocket may be completely infeasible. Currently, nursing-home care costs several thousand dollars a month on average. Some residents pay more than $10,000 per month. By the time you need that level of care, you may not be able to afford it. Long-term care insurance can provide the necessary funding for in-home or nursing-home care.
Later Years (60s and Up)
As you move into retirement, some of your longstanding insurance policies may no longer serve you. Life insurance and disability insurance tend to be less important for seniors who are no longer responsible for minor dependents and no longer in the workforce. (Again, whether or not this will hold true for you depends entirely on your specific circumstances; a grandparent who has custody of a minor grandchild may have different insurance needs than an empty nester.)
Health insurance is perhaps the most important type of coverage for people in this season of life. For property owners, homeowners insurance and liability insurance are still essential. Some seniors also opt for burial or final expense insurance to cover funeral costs and other end-of-life expenses.
Do you have the kind of insurance coverage you need for your current stage of life? Are you looking ahead to the next milestone, and thinking about how it will change your insurance needs? Trust Sachetta to help you prepare for what’s ahead. To learn more about how to protect yourself and your loved ones, contact us today.