One of the factors which you must consider when choosing a life insurance policy is your age. It is an important factor. It can affect the premium you pay. Before knowing which policy, you need to understand that there are two basic types of life insurance policies – whole life and term life. A whole life insurance policy runs from when you take it out, until the time of your death. The premium remains the same for the life of the policy. The second type is term life and is the more popular one. A term life insurance policy is valid for a specified period. Term life insurance provides coverage for a specific period or term. It is sometimes referred to as temporary insurance. The policy pays cash benefits to the beneficiary if death occurs within the specified period or term. Term insurance provides protection for a specified period of time. The insured must die within the specified period for the beneficiary to be paid the benefit. If the policy is not renewed on the expiration of the specified period or term, the coverage ceases. There are no cash benefits if the death occurs after the coverage ceases. Term life insurance is less expensive than permanent life insurance and provides death benefit protection for specified periods of time ranging from 1 year to 25 or 30 years and some even up to age 65, age 80 or age 90. Now to the main question – which life insurance is your best choice based on your age?
If you are in your early 20’s with no debt and either single or newly marred with no kids, your requirement for life insurance is almost nil. At this point, in most cases, you won’t need any life insurance. In the event of your death, there won’t be any debt falling onto your loved ones, and you don’t have any dependents that will need to be cared for. However if you are married and the sole earning spouse, you should take out some form of life insurance, at least a term life insurance for a short term until your life situation changes. As you enter your late 20’s most of you will be having kids and/or debt in the form of some big loan. At this stage in life, it is crucial that you take out life insurance. A term insurance policy covering the life of the loan or a 20 year period will help to provide education and basic necessities for your child in the event of your death as well as remove any debt. If you are in your early 40’s to late 50’s, chances are you will be having kids and/or debt. If you have no debt, you should consider a small permanent life insurance policy, which would cover any legal, funeral and emergency situations in the event of your death. Depending on the ages of your children, you could also include an amount to cover their remaining education expenses. If you do have a large debt, a term insurance policy covering the loan time, along with a small permanent life insurance policy would be beneficial.
If you are retired with no debt, you should get a small whole life insurance policy with an amount covering immediate expenses, such as legal costs, funeral arrangements and emergency situations. You may also want to include a certain amount of money to your beneficiary for a set period after your death.
