Life insurance is something most people don’t like to think about. It’s a product that covers events which we pray will never happen, or, that will hopefully only happen very far in the future. However, as much as people dislike thinking about themselves or a loved one suffering, a serious accident or, an untimely death, life insurance can help provide some peace of mind should these things occur.
Big life events—marriage, buying a home or, having children—often prompt people to consider a life insurance policy. But what about the smaller moments or, lifestyle choices that don’t always signal big changes? Could our life insurance needs change with them, too?
Here are five other times when you may want to consider life insurance.
When you’re in your 20s
A common life insurance myth is that policies are only for older people. The product is linked to major life milestones in many people’s minds, and is also often associated with death. These aren’t topics that 20-somethings are generally worried about, and for this reason they may feel that life insurance isn’t for them. However, there are some great reasons why young adults might consider a life insurance policy.
Price is a concern for many when taking out life insurance, regardless of their age. But young adults may have an advantage over their older counterparts. Life insurance premiums are partly based on factors like your age and health. Generally, the younger and healthier you are, the lower your premiums will be. Those in their 20s have time on their side and may be at their healthiest, which could mean a better deal on insurance than if they wait until their 30s or 40s to get a policy.
Though 20-somethings may feel invincible, the truth is that they’re not. Serious accidents, terminal illness and early death can unfortunately happen to anyone. A life insurance policy could help provide some financial security, by providing funds for hospital bills or, ongoing medical care. It could also help the family pay final debts, such as a loan they cosigned on, or arrange a funeral.
Related: 10 Essential Tips for First Time Life Insurance Buyers
When you’re the stay-at-home parent
Life insurance is often viewed as a way to replace lost income if the family breadwinner were to pass away unexpectedly. However, cover can also help protect a family’s finances in other ways. Stay-at-home parents might want to consider getting covered to safeguard their contribution to the household.
Stay-at-home parents may not bring home a paycheck, but that doesn’t mean they have no impact on the household finances. Some estimates place the average “Mom salary” at an impressive sum! According to a survey by Salary, a division of human resources consultant Kenexa, moms should be charging $115,000 per year for their work.
This figure includes the wide range of duties that stay-at-home parents perform, everything from housekeeping and childcare, to cooking and managing everyone’s schedules.
People often overlook or undervalue the work that many stay-at-home parents do every day. However, if they were no longer around or, able to perform these jobs, it would be costly to hire outside help. For this reason, a life insurance policy covering both partners may make sense for some families.
When you remodel your home or buy a new one
Buying a home is one of the top reasons people give for taking out life insurance. A house is a big investment, and it makes sense that people would want to help protect it. However, lifestyle changes might also mean it’s a good time for home owners to review their insurance needs.
A life insurance policy, taken out when you purchased your home, may not reflect your current lifestyle. People sometimes choose an insurance benefit with their home loan in mind. The intention is that if they were to pass away suddenly, the funds could be used to pay down the mortgage or pay it off completely. However, home upgrades and other changes may mean that the original benefit amount you selected may no longer serve this purpose.
Major renovations or remodels can increase debt, particularly if you used a home equity line of credit or personal loan to pay for them. The same may be true if you upgraded to a bigger house with a larger mortgage. In these cases, you may wish to increase your life insurance benefit. On the other hand, anyone lucky enough to have paid down their home loan may want to lower their benefit amount and possibly save on insurance premiums.
When you’re a frequent traveler
Whether it’s for business, or pleasure, travel may come with risks. Visiting a foreign country with unfamiliar laws and customs could increase your chances of suffering a serious accident or even death. As a holiday-goer, you might also be inclined to try more adventurous activities than you would at home, such as skiing or zip lining. While these activities are generally safe, accidents unfortunately do happen.
Life insurance could give frequent travelers an extra safety net. Travel or medical insurances may not offer enough cover to pay for foreign hospital bills or longer-term hospital care in the event of a serious accident. Even worse, if you were to pass away while overseas, these policies may not be large enough to pay for both, bringing your remains home, and a funeral service. A life insurance policy could supplement travel or medical insurance, allowing travelers to get the help they need once they’re home.
When you’ve reached retirement
Many people choose to let their life insurance policy lapse once they retire. This may make sense for some. By this point, people tend to have paid off their home and may no longer have family members who are dependent on them for financial support, making life insurance less necessary. However, even those in retirement might want to consider keeping their policy.
Life insurance is one way to help pay for your own funeral and other final debts. The cost of funerals is on the rise, averaging between $7,000 and $10,000 in 2017. However, the price of a burial plot, casket and other aspects of a service can vary widely depending on where you live and what type of service you prefer.
A policy may also be used to supplement your estate. With blended families becoming the norm, there may be a number of children, step-children, grandchildren and other relations you’d like to leave money to once you’re gone. Life insurance could help with this, by providing an inheritance, funding a child’s schooling or, for any other purpose you choose.
What life insurance could do for you
Life insurance could be an important part of you and your family’s financial future. No matter what stage of life you’re in, a well-chosen policy could help protect the life you’ve built or aid loved ones after you’re gone. Take a few moments to think over your goals, and consider how life insurance may help you achieve them.