What kind of insurance should you have at different stages of your life? When asked, financial advisers cited disability and life insurance as the most important type of coverage at any stage, as they apply throughout our lives. In addition, counselors have often discussed overlooked issues at different points in your adult life. Here’s a look at some insurance tips for specific ages, from your days at university to the golden years of your retirement.
The security you will need for every stage of life
Here’s a look at five stages of life and the relevant type of insurance recommended for each: – Sallie Mullins Thompson, CPA / PFS, CFP, Washington, DC
College days
“If you are taking out a private student loan … and this loan is co-signed by a parent and is not repaid after your death, then you need some life insurance to cover the loan,” said certified financial planner David J. Haas, owner of Cereus Financial in Franklin Lakes, New Jersey. Because the need is temporary, only for the duration of the loan, the lifespan would be appropriate, he said.
At work
“If you work, you almost certainly need disability insurance,” said Sean M. Pearson, CFP, Associate Vice President at Ameriprise Financial in Conshohocken, Pennsylvania. “Most large employers offer this as a benefit, but that does not mean you have enough.” Note on life insurance: The two main categories are generally referred to as “fixed term insurance” and “permanent” insurance (indefinite term insurance). It is important to understand your coverage, he said. Programs may cover total disability, defined as when the employee is unable to work, or may only cover a situation where the employee is unable to perform part of a job or requires part-time work. “For example, if you earn $ 100,000 a year before an injury or illness and after a change in your health, you could still complete a job that pays $ 40,000 but you can not continue in your current role, you may not be able to earn insurance, “Pearson said.
Family moments
10,000 hours Digitalvision | Getty Images Getting married and starting a family is when things get trickier, said CFP Robert Fragasso, CEO of Fragasso Financial Advisors in Pittsburgh. “If you have a mortgage and need two incomes and want to start saving for college, life insurance would be appropriate until these debts are paid off,” he said. “For liabilities that arise after you pass, such as death taxes, business acquisitions or support for a child with a disability, you should seek permanent insurance.” Long-term disability insurance is often overlooked at this stage, said Haas of Cereus Financial.
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Here’s a look at other stories that offer an economic perspective on important life milestones. “It’s very important when you are young, because it covers a profit life that will be put at risk if you become disabled,” he said. Pearson said be sure to “carry” your disability coverage or take it with you if you take leave to care for a child or family member. “If a parent living at home wants to return to work but has a change in their health during the time they spend as a caregiver, this person may not be able to return to work as quickly or with the expected salary. “, write down.
Preparing for retirement
Pre-retirement is the time to plan protection against chronic illnesses that may require care in retirement, Pearson said. “There are more options [at that age] Or it may be less expensive if you plan early, “he added. “The ‘early’ may be a married couple in their late 30s who do not plan to have children and have extra cash flow after retirement savings, or [in their] “In the late ’50s, when education costs were mostly over,” he said.
Your golden years
If you’ve recently retired or are retiring, one option to protect yourself from wasting your money is a single direct premium income, said Ivan Illan, founder of Aligne Wealth Preservation in Los Angeles. This simple form of income requires a lump sum, generally irrevocable, and immediately pays you a lifetime income stream. (This contrasts with a deferred income, which starts payments at a future date). It is important to note that they do not face the risk of inflation, he said. “The revenue alone is not bad – it’s all in the application,” said Illan. “But there is no free lunch – you are actually giving this lump sum, but cash flow can be significantly better than bonds.”
