INDUSTRY INSIGHT
YOUR FINANCES
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LIFE INSURANCE NEEDS CAN CHANGE OVER TIME
It ’ s easy for many of us to approach life insurance with a “ I ’ ll handle that later ” or a “ set it and forget it ” mentality , and to assume that you have time to sort out the details of adequate coverage down the road . Yet , life insurance can play a key role in protecting your loved ones financially should you pass away unexpectedly . The role protection plays in your financial plan often depends on your life stage . Here are several examples of when you may want to evaluate your life insurance options .
Young adults starting their careers
When you settle into your first or second job and take on responsibility for your own financial matters , you likely are balancing a myriad of priorities . These may include paying off significant student loan debt or managing the mortgage of a newly-purchased home . In the event of your death , you could leave your loved ones on the hook for covering your financial obligations out-of-pocket . A life insurance policy may help provide the cash flow for your parents , siblings or another trusted beneficiary to manage your affairs without it becoming a potential burden .
Newly married couples
As you build a life together with your spouse , it ’ s likely that your individual financial responsibilities will become intermingled , even if you choose to maintain separate bank accounts . If you die prematurely , your spouse could be drastically affected by the loss of your paycheck and added expenses . Life insurance can help protect the financial contributions of each spouse , helping the surviving spouse carry on without major changes in lifestyle .
Parents of minors or young adults
For many Americans , the need for life insurance becomes top-of-mind following the birth or adoption of a child . If you have or are considering starting a family , now is the time to evaluate your insurance policies , ensuring that you have enough coverage to meet your family ’ s day-to-day expenses , in addition to future financial goals . You may want to ensure that regular living expenses are covered for your family over a period of years , as well as education costs for children and retirement savings for the surviving spouse .
Older adults nearing or in retirement
As you accumulate wealth or become an empty-nester , your need for life insurance may decline . Be sure to maintain enough coverage to protect your retirement savings . Once in retirement , the need for a death benefit , which provides annuity or lump sum payments to the surviving spouse , may become less significant . Certain types of life insurance policies may offer the flexibility to borrow against accumulated cash values to provide cash flow in retirement . Evaluate your coverage against what you anticipate spending in retirement to see if these or other options could help your situation .
Those preparing for the transfer of assets
Depending on the size of your estate , taxes may reduce the amount of assets you intend to pass down to heirs after your death . Life insurance could be one way to protect the interests of family members and other beneficiaries . For example , you could purchase a policy with a death benefit that could provide liquidity to offset the impact of any taxes that would be due at your death . This can help survivors avoid being forced to sell assets to meet tax obligations .
No matter your life stage or financial situation , it ’ s important to have insurance in place to provide for your loved ones . Make it a priority to regularly review your coverage and ensure it covers the changing needs of your family . If you would like help assessing your options , talk to an insurance professional and financial advisor familiar with your financial priorities .
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Maximum Contributions , SavingForCollege . com
This Industry Insight was written by Jonathan D . Martin .
Jonathan D . Martin is a Financial Advisor with Ameriprise Financial Services , LLC in Bethel Park , PA . He specializes in financial planning and asset management strategies . Contact Jonathan ’ s office at 412.831.6240 extension 202 , located at 88 Fort Couch Road , Suite 210 , Pittsburgh , PA 15241 , or visit his website at www . ameripriseadvisors . com / jonathan . d . martin . Jonathan is licensed / registered to do business with U . S . residents only in the states of PA , DC , HI , TX , OH , WV , AZ , CA , FL , IL , IN , NC , NJ , SC and VA .
Investment advisory products and services are made available through Ameriprise Financial Services , LLC , a registered investment adviser .
Investment products are not insured by the FDIC , NCUA or any federal agency , are not deposits or obligations of , or guaranteed by any financial institution , and involve investment risks including possible loss of principal and fluctuation in value .
Ameriprise Financial Services , LLC . Member FINRA and SIPC . © 2022 Ameriprise Financial , Inc . All rights reserved .
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