What life insurance coverage do I need at each stage of my life?

Life insurance needs over your lifetime

As you get older and go through the stages of life, your life insurance needs will change. Making sure that you are proactive and having the coverage your family members need will protect them from financial trouble. This infographic summarizes the changing needs of life insurance for the average person over each decade.

20s: Starting your first job and may have some student debt

Your 20s are a time when your health history is probably the best it will ever be. You may not have experienced any illnesses or health concerns that could later make you uninsurable.

You should review your life insurance policy ever few years to make sure that you are covered to meet your changing needs and lifestyle.

Proceeds will help

  • Pay debts like a student loan
  • Cover final expenses

30s: Getting married, having children, an increase in financial obligations

Although your work benefits may provide life insurance, these policies usually provide minimal coverage so you should consider looking into an additional life insurance policy.

Since you are still young and most likely in good health, life insurance should be affordable.

Proceeds will help

  • Pay for mortgage that your spouse couldn’t otherwise afford without your financial contribution
  • Protect a stay-at-home parent who relies on your income
  • Cover childcare expenses including day-to-day expenses and larger expenses like post-secondary tuition
  • Serve as a financial cushion to keep your family from using savings to cover the bills
  • Cover financial expenses

40s: Your peak earning years

If you have already purchased a life insurance policy, your 40s can be a good time to reassess and decide if you need to increase your coverage. 

The insurance policy you put in place in your 20s or 30s may no longer match up with your increased earnings.

Proceeds will help

  • Pay off the remainder of a mortgage that your spouse couldn’t afford without your financial contribution
  • Make up for a gap in coverage because of increased earnings and a lower amount of coverage from when you were earning less
  • Protect a stay-at-home parent who relies on your income
  • Cover childcare expenses, including day-to-day expenses and larger expenses like post-secondary tuition
  • Serve as a financial cushion to keep your family from using savings to cover the bills
  • Cover final expenses

50s: You have been accumulating wealth and are in your final earning years

Children are financially independent and the mortgage has most likely been paid off. Insurance at this age is going to be expensive. However, if you don’t have a lot of assets and still have people that are relying on your income, it may be worth looking into.

Proceeds will help

  • Pay off the remainder of a mortgage, if needed
  • Pay off debts or unpaid bills you wouldn’t want your spouse to be left with
  • Make up for a gap in coverage because of a significant increase in earnings
  • Protect a non-working spouse who relies on your income
  • Serve as a legacy or financial cushion for your beneficiaries
  • Pay for medical bills not covered by the government
  • Cover final expenses

60s: Entering retirement

Most think that it’s too late to buy life insurance. It’s not! It may be at a premium and you likely won’t be able to buy a policy that has a term length of over 20 years but it may still be worth considering.

Proceeds will help

  • Pay off debts or unpaid bills you wouldn’t want your spouse to be left with
  • Protect a non-working spouse who relies on your income
  • Serve as a legacy or financial cushion for your beneficiaries
  • Pay for medical bills not covered by the government

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