Learn which life insurance products are right for the different stages and seasons of life
Life insurance provides protection and peace of mind for you and your family should the worst happen. But life isn't static; it changes, moving through stages from one season to the next. As you and your family grow, your needs change, too. So, how can life insurance policies meet the different needs of each stage of life?
As you may know, there are many types of life insurance
each with a range of customizable options. So, what type of life insurance should you get? What type of life insurance policy is right for your
stage of life?
Today, we'll take a look at some common stages of life, and discuss the types of life insurance solutions available for each. Read on!
Life insurance is usually associated with individuals who have children, or otherwise have family members that rely, in part or whole, on them and their ability to earn income. For this reason, people don't often consider the possible situations that life insurance may cover for those in their college years, or the years just after college.
Student loans are increasingly necessary for college degrees, such as a bachelor's or master's degree. These loans can often be large, and because college students usually don't have a credit history, a cosigner. If a family member co-signs the debt for a student loan, that means that they are responsible for taking on that debt should something happen to the student.
Fortunately, there are life insurance products that are perfect for providing protection for college students with student loans. For example, a 10-year term life insurance product is perfect for students with outstanding loan amounts. For those with lower loan amounts, 10-year policies typically start at a $50,000 benefit. However, the benefit for the same 10-year policy can be increased substantially, making it a perfect fit for those who seek multiple degrees or otherwise have a large student loan.
These types of term policies can be secured for a comparatively low premium for the benefit they offer and they often have a simplified application process. This means that medical exams are not necessary for the underwriting process, which makes the turnaround time relatively quick.
10-year term policies are ideal in most situations, but some individuals might find a 5-year policy to be a better fit depending on the amount owed. They generally follow the same application process as the 10-year, but only offer a smaller coverage amount, such as a maximum of $50,000.
The union of marriage brings two individuals together, but sometimes that means assuming each other's debts, too. A 10, 20, or 30-year level term can be perfect for this stage of your life because of the larger face amounts
, low premiums, and minimal underwriting application requirements/process.
It's important to understand that "level term" may be used to describe two different types of policies. Depending on your insurance provider, a level term policy may refer to a level premium policy, or a level benefit policy. A level premium policy has a premium that is fixed and remains the same over the length of the policy. However, the cost of a level premium is usually greater to account for the fact that it never changes.
A level benefit policy is a product where the death benefit, or the amount paid to your beneficiaries in the event of your death, is the same regardless of when the benefit would be paid. In other words, the death benefit is the same whether it is paid on the first or last year of the policy. This is a valuable feature for a life insurance product as it removes any uncertainty about the amount your beneficiaries will receive.
When shopping for a term life policy, make sure you to ask your agent which type of policy they offer. They will be able to help you understand the specifics regarding the policies they offer and help you find one that's right for you.
Whole life coverage is a great investment at any age, and if young couples have the means to take out whole life coverage early in their marriage, or at a young age, premiums are locked in and cash value begins to grow.
Starting a family
Starting a family usually means bringing fresh faces into the world! While you may not normally think of purchasing a life insurance policy for a child, products like 10-pay juvenile whole life policies allow a parent or grandparent to take out a policy for a child, usually when they're 6 months old. This policy stays with the child through their whole life, and gives them the ability to take out additional coverage amounts at various times in their life, regardless of their health. This is what is known as guaranteed insurability, and it can be a valuable feature for someone as they go through the often unpredictable stages of life.
Other types of permanent life insurance options for for young children are whole life policies like Economy Whole Life and Participating Whole Life. Both offer coverage for life while gaining cash value over time. However, the Participating Whole Life has a non-guaranteed dividend option that allows the policy to grow in death benefit on an annual basis while still gaining cash value.
For new or expecting parents, 10, 20, and 30-year term life policies are great options. They usually offer a substantial death benefit for a low premium, especially for young parents. This gives you and your spouse peace of mind knowing that, should the worst happen, your family will be financially secure.
Planning for the future
Taking on debt is a typical part of most families' financial futures, at least for a time; mortgages, car payments, and student loans are a few examples of common loans that a family may take on and work towards paying off over time. However, should something happen to you or a spouse, they could be responsible for the remainder.
That's why decreasing term
life insurance is a good fit for debt protection. As you pay off your debt, the amount you owe decreases. The decreasing term benefit decreases over time, and as such, can be obtained for a premium that is lower than most other comparable policies.
Many people don't account for the fact that life insurance policies provided through an employer as part of a benefit package cease when they retire. If your employer provides a life insurance benefit, it's important to reevaluate your coverage as you near retirement.
During this stage of your life, it's often valuable to perform a self-assessment, or consult with your financial advisor, to determine exactly how much debt you may leave your spouse and loved ones if you are no longer able to financially contribute.
Depending on your debt and financial obligations you have upon retirement, and depending on your retirement planning, both term and whole life insurance policies might be a good fit. Those who may still have some debt remaining may find a shorter term policy, such as a 10-year term, to be the best option. Whole life could be a better fit for those who only need a small amount of coverage after retirement.
End of life
Facing and planning for the final seasons of life is never easy and it is often an uncomfortable topic to think about or discuss. However, for the sake of your loved ones, it is important to begin planning for this stage earlier rather than later. This is because declining health is often associated with the later years of life, and as such, it may be difficult or cost prohibitive to get the life insurance coverage you need.
Certain whole life plans can be made to perfectly address these issues and provide coverage for end-of-life expenses, such as funerals. Funeral costs can be expensive; the average cost of funeral services in Texas
is between $7,000 and $12,000, not including medical expenses. Some whole life plans are available for individuals between the ages of 49 to 85 who may have health concerns that limit their ability to purchase other types of coverage. These policies have smaller guaranteed death benefits, but have a simplified underwriting process that doesn't typically require a medical exam.
What type of life insurance is right for your stage of life?
We've discussed a number of possible stages, or seasons, of life and discussed possible life insurance solutions for each. However, everyone's life is different, and so are their life insurance needs. While most life insurance carriers generally offer similar types of policies, coverage options and specific policy details will vary between them.
That's why the first step to finding the life insurance policy that works for you and your stage of life is to reach out to your insurance provider or agent. They will work with you to understand your individual needs and help you find a product that best addresses them.
To learn how Germania Life can help you find a policy for the seasons of your life, call 1-800-392-2202 (ext. 2060), or visit our website here!