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Because
your life insurance needs will
change over time, you may want to
consider a “layering” approach to meet your needs. This consists
of purchasing a permanent policy
to cover your permanent insurance
needs, then “layering”
additional term coverage to
address any temporary
needs.
This type of strategy will help ensure you are properly covered well
into the future.
The Early Years
When you are single or newly
married with no children,
there is little need for life
insurance unless one spouse
would find it difficult to support
himself should the other spouse
die, or if you want to protect
future insurability. Insurance
sufficient to cover final expenses
and outstanding debts is all that
is usually needed at this time.
The Young Family Years
The need for life insurance
increases dramatically when you become a parent.
Both parents will want to consider
coverage, even if one does
not work outside the home.
Term insurance is a popular
type of coverage during these
years because it provides the
most coverage at the lowest cost.
Some young couples start with
a permanent policy or a combination
of term and permanent
insurance. A benefit of buying
a whole life policy when you are young
is that you can lock in a fixed lower
premium.
The Middle Years
These are the years when your
children leave home and your
income usually continues to increase.
You may consider dropping some of your
term insurance and converting the
remaining coverage to
permanent as you look toward
retirement.
The cash
value of permanent insurance
can be used for a variety of purposes
including your retirement
income or to purchase long-term
care insurance to protect
your family from any financial
burdens.
The Retirement Years
If you have developed
income-producing assets
and have a good pension, you
will not need much life insurance during retirement.
However, if your assets
are modest, the life insurance
proceeds from the first to die
will still be needed to provide
income to the surviving spouse.
Most
retirees maintain some coverage
to pay funeral and burial
expenses, to cover the cost of
a final illness or estate taxes,
to make a final bequest or to
provide money for children
and grandchildren.
Peace of Mind
Whichever stage of life you are in, remember to review your coverage
annually. This will help ensure your loved ones
have the protection they need.
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