Purchasing life insurance is a rite of passage for many first-time parents. Protecting your young family and providing for your children in the event of your sudden death is top of mind for many mothers and fathers, especially for single parents and sole breadwinners.
But life insurance isn’t just for new parents. Many people need life insurance, and it can be a useful part of your financial plan at many stages of life.
Here are some of the best life insurance policies you may want to consider, depending on your age, life situation, and financial goals.
Best Life Insurance for Teens: Term Life Insurance
If you’re a single guy in your early 20s with no children, you may be wondering if you really need life insurance. The answer: Maybe! Ask yourself:
- Is there anyone to help you pay off your debts? If you die, term life insurance can help pay your benefits.
- Would you like to help care for your parents in the event of your death? Term life insurance can provide cash for your parents or other loved ones, even if they are not your children or other dependents.
- Do you have a niece, nephew, or best friend who you would like to support in the event of your death? Term life insurance can help you take care of other people in your life, even if they are not your child, or even if they are not your relative.
- Do you want to have a husband or children in the future? Even if you’re not married or have children, getting term life insurance while you’re young can help with affordable premiums.
Why is life insurance the best option: It’s usually the cheapest life insurance you can get – it offers the most coverage (death benefit) for the lowest monthly premium. And if you’re generally healthy, like a young person in your 20s, you can get cheap rates on term life insurance. For example, if you’re 25 and a non-smoker, you can get $500,000 of life insurance coverage from the best life insurance companies for as little as $20 a month, depending on the length of the term.
Best Life Insurance for New Parents: Term Life Insurance
Are you welcoming a new baby into your life? Congratulations! But also: condolences to your bank account. Children are worth the effort, but they are expensive; It takes an average of $300,000 to raise a child from birth to age 17.
Special offers: Check out our picks for the best life insurance companies
Purchasing life insurance for your family can be a great way to protect your loved ones in the event of your death. Whether you’re a single parent, a single breadwinner, or a full-time caregiver at home, you need life insurance to care for the people who depend on you, and to replace the resources they might lose if you’re gone.
Why is life insurance the best option: It’s affordable for young parents on a limited budget, and you can choose a term that suits the length of your children’s childhood. For example, you could get a 20-year term life insurance policy to cover you until your child graduates high school, or a 30-year term policy if you have multiple children with a larger age difference.
Also ask at work if you can join a group life insurance plan. Some employers offer free or low-cost group life insurance as part of a financial wellness benefits package. That may not give you enough coverage, though — some companies’ free group life insurance policy may only include $25,000 to $50,000 of coverage. Consider purchasing your own life insurance policy along with any free policy you get at work.
Best life insurance for middle-aged working people: Universal life insurance
Let’s say you’re in your mid-40s. You have a family, a home and a successful career. You make good money and have retirement savings. Now is a good time to reevaluate your life insurance. Ask yourself:
- Is the term life insurance policy you bought 15 years ago when your first child was born still suitable?
- Do you have enough life insurance coverage to offset your (higher) income?
- Has your family’s mortgage gotten larger since you first purchased life insurance?
- Are you saving money for your children’s college fund? What happens to their 529 accounts if I die?
For all these reasons, you may need more life insurance in midlife than you did in your 20s. Your family’s expenses may have gone up, and hopefully your income has gone up — you need life insurance to pay larger bills and replace stronger cash flow.
Why universal life insurance is the best option: You can also purchase more term life insurance! But if you’re financially comfortable and want to protect your loved ones while investing in the future, universal life insurance may be worth the high premium costs. Universal life insurance can offer you more flexibility and a more interesting financial aspect than a simple life insurance policy.
Universal life insurance costs more than term life, but it allows you to build cash value, or invest in securities, as part of your term life insurance policy. It’s also flexible, allowing you to change the premium amount, change the death benefit, or stop paying premiums for a period of time (if you have enough cash value). Universal life insurance isn’t right for everyone, but it offers some useful features that may make it a good fit for your personal finances.
minimum: Term life insurance is a good option for most situations. But if you can afford higher premiums and want your life insurance policy to have cash value, offer flexibility, and give you investment options to grow your savings, universal life insurance can provide a higher return on investment.
Our picks for the best life insurance companies
Life insurance is essential if you have people who depend on you. We’ve combed through the options and developed a best-in-class list of life insurance coverage. This guide It will help you find the best life insurance companies and the right policy type for your needs. Read our free review today.