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How to Choose an Age-Appropriate Life Insurance Policy

You might need life insurance if you have dependents who rely on your income or outstanding debts that will continue to accrue after your death. Suppose the policyholder dies or suffers from permanent disability due to an accident. In that case, life insurance policies pay a predetermined sum to the beneficiary or beneficiaries named in the policy.

It is essential because it shields your loved ones from financial distress and enables you to give them an amount exempt from estate taxes when you pass away. You must know the varying insurance packages for individuals of different ages to see what meets your needs and how it can transform your life.

Life Insurance for Seniors

Term life insurance is typically recommended for young adults, but there are also numerous advantages to purchasing such a policy in your senior years.

If something were to happen to you, your spouse would be protected financially by a term insurance policy. Plainly speaking, if your spouse depends on your income, they may be in a tough spot if you were to die. The goal is to ensure that your spouse receives the death benefit from your policy if the worst happens.

It’s also possible that your children are not yet self-sufficient and count on you to pay for their needs. One way to ensure their well-being until they can support themselves financially is to invest in a term insurance policy.

You might also want to look into Medicare, which is federal health insurance for anyone aged 65 and up. You have the op[tion to choose between Original Medicare and a Medicare Advantage Plan. The latter may include benefits such as vision, hearing, and dental care that aren’t included in Original Medicare. Before deciding, research and compare medicare advantage plans pros and cons to find the policy that fits your needs.

Life Insurance for Young Adults

Investing in life insurance may not cross the minds of many young adults. However, there are many reasons why getting life insurance at a young age could be a good idea.

Young individuals may want to purchase term, whole, or universal life insurance. This could be done to start saving money for retirement, pay off estate taxes, or ensure they are covered in the case of an accident or sickness. Many insurance companies will let you convert your term life policy to a permanent one if you’re a young adult who wants to ensure they’re covered even after the term has ended.

Purchasing permanent life insurance early in life could be a smart long-term financial move for young adults. Unlike term life insurance, which expires after a specified number of years, coverage under a permanent policy continues for as long as payments are paid.

There is also the investment element with permanent life insurance. Your premium contributes to a cash value account that may grow over time depending on the performance of the insurance company and can be used to increase the death benefit you leave to your beneficiaries. The cash value of a permanent life insurance policy, like the value of other savings and investment vehicles, grows over time, so the sooner you start paying into it, the better.

Life Insurance for College Students

It is common practice for both public and private universities to require health insurance for all full-time residential students, and some institutions even go as far as to automatically enroll incoming freshmen in their own insurance plan.  If you, as a parent, already have a health insurance plan that satisfies the criteria set forth by the institution, you will not be required to contribute to the plan it offers.

In addition, if the unimaginable happened and your college student passed away, you could be financially liable for whatever joint financial obligations you and your child  had taken on.

Since term life insurance typically only covers the insured for a set time (anywhere from five to thirty years), it could be a good choice for college students. It could be wise to keep a term policy even if private student debts are being repaid. There will be no death benefit paid out or premiums to pay after the term policy expires (unless you decide to convert the policy to a permanent life policy).

College students can also choose to get a whole life insurance policy. Cash value accounts, which are included in whole life insurance plans, can be used as savings or investment vehicles. However, whole life insurance policies are often more expensive than term policies, and in many states, only people over the age of 45 are eligible to purchase them.

Life Insurance for Children

When an adult purchases insurance, they often serve as the policyholder and the insured. On the other side, a child’s insurance policy will list a parent, grandparent, or legal guardian as the policyholder even though the child would receive benefits.

If the covered child passes away, the policyholder can be the beneficiary and collect the payout. However, unlike insurance for adults, options for children are limited.

For example, you can’t get a child a term life insurance policy, that would only cover them for a set period of time. But if you purchase a term life insurance policy for yourself, you may be entitled to add a rider to cover all of your children until they reach a specific age, where the policy can be converted to a permanent plan at an additional cost.

Also, as the policy’s owner, you can give your child the insurance anytime. When children reach adulthood, their parents often hand over their insurance policies and let them take responsibility for paying the premiums.

Final Thoughts

By purchasing insurance, you allow yourself to plan for anything that the future may bring, including sickness, hospitalization, reaching retirement age, or even passing away. Therefore, we hope you will seriously consider getting a suitable insurance policy now that we have emphasized its importance and you have better understood the best policies to purchase at different ages.

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