The Essential Insurance Guide for Every Life Stage
- Young & Single
- Newly Married
- Married with Children
- Empty Nesters & Retirees
As you transition through life’s stages, your insurance needs will inevitably change, reflecting your evolving responsibilities and financial landscape. Whether you are just starting out, newly married, raising children, or preparing for retirement, it’s vital to regularly reassess your coverage to ensure you are adequately protected. By understanding the importance of various insurance types and seeking professional advice, when necessary, you can secure peace of mind and safeguard your financial well-being for years to come.
This material was prepared by Fresh Finance for Nate Wyatt and the Investment Service Center’s use.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
Copyright FMG Suite.
ART Tracking #: 757131-02-01
The transition to adulthood is an exciting new stage that marks true independence. You may have graduated college, taken your first job, and even rented your first apartment. With this new freedom come real responsibilities, including protecting yourself from the financial risks life presents.
Auto
For young insureds, once they are no longer covered on their parent(s) policy, they will need to find insurance coverage in their name. It can be expensive for a young driver, so consider shopping around for the best rates and learn the myriad of ways to manage costs, such as coverage and deductible elections.
Renter’s
If a young adult is moving into an apartment, they should consider renter’s insurance. They may not think they’ve accumulated much in value, but when calculating the cost of replacing a computer, electronic equipment, HD-TV, furniture, clothes, sports equipment, bikes, etc., it can run into thousands of dollars. Renter’s insurance can be inexpensive. When shopping for a policy, ask about whether it includes liability coverage, which can protect one in the event of being sued by someone who is injured in your apartment.
Health
Health-care coverage is frequently obtained through one’s employer. However, if your employer does not offer a health insurance program, there are two choices for obtaining coverage.
The first is to maintain coverage through a parent’s health insurance plan. Federal law permits parents to keep adult children on their plan up to age 26. This choice may be relatively inexpensive, so one may want to ask their parents to inquire what the monthly premium is to add them to their plan.
Another idea is to purchase a policy directly, either through a private insurer, the federal health insurance exchange (HealthCare.gov), or through a state exchange, if available in your state of residence.
While supplemental health coverage, such as AFLAC or cancer policies, may be available, we typically do not recommend them. Instead, establishing an emergency fund with 3-6 months' worth of expenses is a more effective way to hedge against risk. Furthermore, it's essential to evaluate deductibles for all types of insurance. Generally, the purpose of insurance is to hedge against catastrophic loss. Whenever possible, it makes sense to save money to increase your deductible, which can lead to lower premiums.
Disability
Your single most valuable asset is your future earning power. The ability to work and earn an income is essential when it comes to one’s financial survival. Incurring a disability, even for a short period of time, can have substantial economic consequences, making disability insurance one of the most important insurance needs at this stage of life.
Keep in mind that this article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your legal professional before implementing a strategy that includes disability insurance.
Life
Since a young, single adult typically does not have other people depending upon his or her ability to earn a living (e.g., children, dependent parents), some believe the need for life insurance is minimal.
However, due to a long-life expectancy at this young age, life insurance coverage can be very inexpensive. One may want to consider obtaining some coverage to take advantage of low rates and good health in advance of a time when they will have dependents.
Several factors will affect the cost and availability of life insurance, including age, health and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. Consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Extended Care
Given limited financial resources, extended care insurance may be a low priority. Nevertheless, one may want to have a conversation with their parents about how extended-care insurance may help protect their financial security in retirement.
Auto
Home
As you embark on this new journey, it’s also important to consider coverage for various items. This includes extensions of homeowners or renters insurance for personal belongings, as well as coverage for shared assets like vehicles, recreational equipment, or home-based businesses.
Take special care of what is covered under the policy, the types of covered perils, and the limits on the amount of covered losses. Pay particular attention to whether the policy insures for replacement costs or actual cash value.
Health
Disability
Keep in mind that this article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your legal professional before implementing a strategy that includes disability insurance.
Life
Liability
Extended Care
Auto
Home
The second reason is that the costs of rebuilding—and debris removal—may have risen over time, necessitating an increase in insurance coverage.
Health
Disability
Life
The amount of life insurance coverage needed to fund this potential financial loss is predicated on, among other factors, lifestyle, debts, age and number of children, and anticipated future college expenses.
Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. We generally see term insurance being the most appropriate for this stage of life. It is very affordable. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. Consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Some couples decide to have one parent stay at home to care for the children full time. The economic value of the stay-at-home parent is frequently overlooked. Should the stay-at-home parent die, the surviving parent would likely need to pay for a range of household and child-care services and potentially suffer the loss of future income due to the demands of single parenthood.
Extended Care = Long-Term Care
The preservation of one’s assets may not be solely a function of their investment strategy but may include a comprehensive insurance approach to protect them against an array of financial risks, most especially health care.
In addition to wealth protection, one can also now be seriously contemplating a number of important estate and legacy objectives.
Home
As you transition into this stage of life, it's important to consider coverage for various items, including extensions of homeowners insurance for valuable collectibles, recreational vehicles, or home-based businesses.
Also, consider an umbrella policy, which is designed to help protect against the financial risk of personal liability.
Health
If you retire prior to age 65 when Medicare coverage is set to begin, the retiree will need coverage to bridge the gap between when they retire and when they turn 65. If their spouse continues to work, they may want to consider getting themselves added to his or her plan, though they may need to wait until the employer’s annual enrollment period.
Alternatively, they may also purchase coverage through a private insurer or through HealthCare.gov (or your state’s program, if available).
Once enrolled in Medicare, one should consider purchasing Part D of Medicare, the Medicare Prescription Drug Plan, which can help save money on prescriptions.
Medigap = Medicare Supplement
Disability
The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
Life
Several factors will affect the cost and availability of life insurance, including age, health and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. Consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Extended Care
Designed to pay for chronic, long-lasting illnesses and regular care, whether in-home or at a nursing home, extended care insurance coverage is critically important since most of these costs are not covered by Medicare.