Life Insurance Needs
Here are some Milestones in Life that will play a factor in what types of Life Insurance you should be looking at...
Different stages in your life will come with different needs and objectives.
Our goal at The AIC Agency is not to sell you a policy, but help you and your family fulfill your goals in the most efficient cost effective manner possible
Just Got Married
Getting married in and of itself doesn't mean you need to purchase life insurance. However, events associated with getting married, like buying a house and having children, do mean that you'll probably need it soon. Since life insurance gets more expensive as you get older, and since a decline in health could make your policy more expensive or make you uninsurable, you might want to go ahead and get life insurance when you get married if you're young and healthy.
Just Bought a House
Mortgage protection insurance guards against the loss of income of the person, or people, responsible for paying the mortgage. This is to prevent one catastrophic event doesn't lead to another like the loss of your family's home. Though it is important to protect against the loss of a breadwinner's income when there are significant household expenses like a mortgage, you wouldn't necessarily need to immediately pay off the mortgage if that person passed away, which is what mortgage protection insurance does. What you would really need is cash to cover all of your living expenses. Term life insurance will give you the cash to spend as you see fit.
The only reason to consider mortgage protection insurance instead of term life insurance is if you can't meet the underwriting criteria for the latter. You may be able to get mortgage protection insurance without passing a medical exam. However, it's also possible to get small amounts of term life insurance without a medical exam, so if you're difficult to insure, a combination of both of these products might be right for you.
Baby on the Way
Perhaps the most important time to have life insurance is during the years when your children rely on you to provide for them. As soon as you know that a child will be entering the picture, you should get life insurance, if you don't have it already. If you or your spouse passes away unexpectedly, the surviving spouse will bear the burden of not only earning an income, but also caring for the children.
At this stage in your life, you'll want a substantial policy that will not only pay for 18 (or more) years of child-rearing expenses but also ongoing household expenses and perhaps college tuition. Make sure to buy enough insurance to allow your family to maintain the same standard of living.
If you already have life insurance at this stage, you should re-evaluate your policy because you might need to purchase more coverage.
Time to Retire
By the time you reach retirement age, your term policy probably will have run out. If you want life insurance when you're older, it will be very expensive--possibly prohibitively expensive. That's because your chances of dying, and the chance that the insurance company will have to pay a death benefit, increase substantially when you're older. In other words, you become a riskier customer, and insurance companies will ask you to pay accordingly.
If you have a whole life policy, it will cover you until you die, but if you no longer need the policy, you may want to terminate it to save the monthly premiums and get full use of your cash value.
If you've planned carefully for retirement and avoided any major financial disasters in your working years, you shouldn't need life insurance when you're older. Your retirement accounts and the rest of your nest egg should provide for a surviving spouse's needs. Your mortgage may be paid off, and your children will be old enough to support themselves.