Aspects
From college to retirement, financial gurus weighed in on the best types of insurance to buy.
Disability and life insurance are recommended for all ages.
Marrying and having children complicates everything, says certified financial planner Robert Fragasso of Fragasso Financial Advisors in Pittsburgh.
What kind of insurance do you need at different ages? Disability and life insurance are the most crucial types of coverage at any stage, according to financial gurus.
Advisors also emphasized important factors at different stages of adulthood. From college to retirement, here are some age-specific insurance tips.
Life insurance for every stage
Here are five life stages and the recommended insurance for each:
Single:
Renters, health, and auto
Newlyweds:
Homeowners and life
With college-age kids:
Liability coverage for teenage drivers. Profit from company FSA/125 plans. Give your kids a life insurance coverage.
emptiness:
LTC or hybrid life insurance
Retirees: Medicare plus Medigap. No longer disabled. LTC insurance is vital. Life insurance for surviving spouse and heirs.
— Sallie Mullins Thompson, CPA/PFS, CFP
Alumnae
According to certified financial advisor David J. Haas of Cereus Financial in Franklin Lakes, New Jersey, if you take out a private student loan with a parent and it is not discharged upon your death, you need life insurance to cover the amount.
Because the need is brief, a term loan would be ideal.
Working
We need disability insurance if we are working, said assistant vice president of Ameriprise Financial in Conshohocken, Pennsylvania. "Most large employers provide it as a benefit, but it is not enough."
Note on life insurance: The two primary classifications are "term" (insurance for a set duration) and "permanent" (insurance for an undefined period of time; i.e., lifetime).
It's critical to comprehend your coverage. Plans may cover total disability (inability to work) or partial disability (inability to perform part of a job or decreased hours).
"For example, if you were making $100,000 before an injury or illness, and you could still do a job paying $40,000 but are unable to do so, you may not be eligible to collect insurance," Pearson said.
It's a
Marrying and having children complicates matters, says CFP Robert Fragasso, CEO of Fragasso Financial Advisors in Pittsburgh.
"Term life insurance might be acceptable until those debts are settled if you have a mortgage and need two incomes," he said. "Permanent insurance should be considered for commitments such as death taxes, business buyouts, and sustaining a disabled kid."
As a result, long-term disability insurance is typically disregarded at this time.
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"The younger you are, the more significant it is because it covers a lifetime of income," he remarked.
If you take a leave of absence to care for a kid or family member, look into "porting" your disability coverage. Re-entering the workforce may not be as easy or as lucrative as planned for stay-at-home parents who have health issues while caring for their children.
preparing to retire
Preretirement is the time to plan for chronic sickness care, according to Pearson.
"More options [at that age]... if you plan ahead of time, "he said. In their late 30s or late 50s, when schooling expenses are mainly over, a married couple without children could be considered ‘early.'
Those halcy
A single premium instant annuity can help protect against outliving your money, according to Ivan Illan, founder of Aligne Wealth Preservation in Los Angeles.
This simple annuity needs a one-time payment and provides a lifetime income stream. (A deferred annuity pays out at a later period.) They don't handle inflation risk, he says. "Annuities are not inherently bad," Illan said. No free lunch - you're throwing away a large payment, but the cash flows can be superior to bonds.
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