Here are the insurance advisors who say you will need it at every stage of life

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What kind of insurance should you have at different stages of your life? When asked, financial advisers identified disability and life insurance as the most important type of coverage at every stage, as they apply throughout our lives.

In addition, counselors discussed often overlooked considerations for various points in your adult life. Here’s a look at some age-specific insurance tips, from your university days to your golden retirement years.

The insurance you will need for every stage of life

Here is a look at the five stages of life and the type of insurance recommended for everyone:

  1. unmarried: Health, disability, tenants, cars
  2. Young married: Add life and homeowners
  3. With children up to college age: Increase car coverage for young drivers, add responsibility. Take advantage of the employer’s FSA / 125 plans. Give life insurance to your children.
  4. Empty nests: LTC or hybrid life and LTC policies
  5. pensioners: Medicare, with Medigap policies. No more need for damage. Long-term care insurance is very important. Life insurance required for a surviving spouse and inheritance for heirs.

– Sally Mullins Thompson, CPA / PFS, CFP, Washington, DC

College days

“If you take out a private student loan … and this loan is co-signed by a parent and is not released after your death, then you need life insurance to cover the loan,” said certified financial planner David J. Haas, owner of Cereus Financial in Franklin Lakes, New Jersey.

As the need is temporary, only for the term of the loan, the term would be appropriate, he said.

During work

“If you work, you almost certainly need disability insurance,” said Sean M. Pearson, CFP, associate vice president of Ameriprise Financial in Konshohoken, Pennsylvania. “Most big employers offer it as an advantage, but that doesn’t mean you have enough.”

Life insurance note: The two main categories are usually called “term” (fixed term insurance) and “permanent” (indefinite term insurance; ie life insurance).

It is important to understand your coverage, he said. The plans may cover full disability, which is defined as when the worker is unable to work, or may only cover a situation in which the worker is unable to perform part of the work or requires reduced working hours.

“For example, if you earn $ 100,000 a year before an injury or illness and after a change in your health you can still do a job that pays $ 40,000, but you can’t continue in your current role, you may not be able to get insurance,” he said. Pearson.

Family time

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Getting married and starting a family is when things get more complicated, said CFP Robert Fragaso, CEO of Fragasso Financial Advisors in Pittsburgh.

“If you have a mortgage and need two incomes and want to start saving for college, term life insurance would be appropriate until these debts are paid,” he said. “For liabilities that arise after the transfer, such as death taxes, buying a business or supporting a child with a disability, you need to seek permanent insurance.

Long-term disability insurance is often overlooked at this stage, said Haas of Cereus Financial.

More from Life Changes:

Here’s a look at other stories offering a financial perspective on important stages of life.

“The most important thing is that you are younger, because it covers the whole life of the profit that will be endangered if you become disabled,” he said.

Pearson said don’t forget to consider “transferring” your disability coverage or taking it with you if you’re taking leave to care for a child or family member. “If a parent who stays home wants to return to work, but there is a change in health during the time spent as a caregiver, that person may not be able to return to work so quickly or at the expected salary,” he said. .

Preparing for retirement

Pre-retirement is the time to plan protection against chronic illnesses that may require retirement care, Pearson said.

“There are more choices [at that age] … it can be cheaper if you plan early, he added. “Early” may be a married couple in their late 30s who have no plans to have children and have extra cash flow after retirement savings. , or [in their] in the late 1950s, when education spending ended, “he said.

Your golden years

If you have recently retired or are retiring, one way to protect yourself from surviving your money is a single immediate annuity, said Ivan Ilan, founder on Aligne Wealth Preservation in Los Angeles.

This simple form of annuity requires a lump sum advance, which is usually irrevocable and pays you an immediate stream of lifelong income. (This contrasts with a deferred annuity that starts payments on a future date).

It is important to note that they are not dealing with inflation risk, he said.

“Annuities are not evil in themselves – it’s all in the application,” Ilan said. “But there’s no free lunch – you’re essentially handing out that lump sum, but cash flow can be significantly better than bonds.”

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