A guide to life insurance at different stages of life: How do young people, new parents, and middle-aged people make choices?

Purchasing life insurance can be a great way to protect your loved ones in the event of your untimely death. Whether you are a single parent, the sole breadwinner or a stay-at-home parent, you need life insurance to take care of those who depend on you and replace the resources they would lose if you were to pass away.

Why Term Life Insurance is the Best Choice:

It is affordable for young parents on a budget, and you can choose a term that fits the length of your child’s childhood. For example, you can buy a 20-year

Term life insurance to cover your children until they graduate from high school, or a 30-year term if you have multiple children with large age gaps.

Also, ask if your company can enroll in a group life insurance program. Some employers offer free or low-cost group life insurance as part of a financial benefits package. It may not provide you with enough coverage — some companies’ free group life insurance may only have a coverage of $25,000 to $50,000. Consider purchasing your own term life insurance in addition to any free coverage you get at work.

The best choice for busy middle-aged professionals: Universal life insurance

Let’s say you’re in your 40s. You have a family, a house, and a successful career. You make a good living and have retirement savings. Now would be a good time to reevaluate your life insurance. Ask yourself:

– Is the term life insurance policy you purchased 15 years ago when your first child was born still appropriate for you?

– Is your life insurance sufficient to replace your (higher) income?

– Has your home’s mortgage payment increased since you first purchased life insurance?

– Are you saving for your children’s college funds? What happens to their 529 accounts if you pass away?

For all of these reasons, you may need more life insurance in middle age than you did in your 20s. Your family’s expenses may have increased, your income expectations have increased, and you need life insurance to pay larger bills and replace stronger cash flow.