This group can benefit from taking out the same covers as listed above for those in early adulthood but there are other cover options that they may want to consider in addition to income protection, personal accident and term life insurance (which is especially important to those in this life stage).
Most insurance needs are cumulative, which is why there are always options to bundle policies together. By this life stage, many people will already have some combination of the cover options listed for the previous life stages. Whether it be a comprehensive life insurance policy that covers trauma and TPD or the insurance provided through your super, you will most likely have some form of protection in place.
This is the life stage that people spend their entire lives building to and hopefully a time of reduced financial obligations.
Many people in this life stage have a large chunk of their mortgage paid and hopefully have a healthy balance in their superannuation. After years balancing the costs associated with their children, trying to reduce their debt and put money away for retirement, they have made it.
However, their need for financial protection is still very real. Health and insurance is important because of the increased risk of illness and injury that comes with age.
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The average cost of life insurance varies with your age. This is due to a variety of factors based on your age including your life expectancy and the length of your cover.
The average life expectancy varies with age.
Life insurance needs are also affected by your dependants
Life insurance for single people
As a young, single person you may think that it’s unnecessary to purchase life insurance, but this isn’t the case. Life insurance can offer you and your family financial security and be bundled to provide income protection or critical illness insurance. If you have debts from university or personal loans, life insurance can allow your family to pay them off if something happens to you.
Life insurance is at its least expensive when you’re young and healthy and if you purchase a plan early you can reap the benefits of cheaper overall premiums. If you find a brand that you like, you can start with a cheaper plan and add in coverage as you grow older and build your family.
Just remember, you don’t have to buy the most expensive policy from the start. Talk to an adviser and pick a plan that suits your personal needs and can grow as your needs change.
Life insurance for couples
Similar to life insurance if you are single, getting married or having a partner increases the need for quality life insurance. In the event of death, life insurance can provide your partner with the ability to pay for expenses and keep the household in order. As a young couple, you will have similar accessibility to that of a young, single person, meaning you are generally eligible for lower premiums.
Life insurance is important for couples because there are usually more monthly expenses in the form of:
- Mortgage
- Car payments
- Medical bills
- Debt and loan payments
In the event of a life insurance claim, the lump sum payment can be used to pay off these debts or provide a monthly income.
As mentioned with insurance for single people, avoid risks associated with purchasing insurance by buying only the coverage you need and by shopping around to find the best price to fit your budget.
Life insurance if you have kids
Life insurance becomes increasingly important when you have children. In the event of death, the financial responsibility of raising a family may fall onto the single income of your spouse. Having a life insurance policy also adds the ability to bundle trauma insurance or income protection into your policy so that you can receive a lump sum payment in the event of a critical injury or monthly instalments if you cannot work.
On top of other financial responsibilities for couples, having children can multiply your expenses.
- The average cost of raising a child is $488 per month. This is a number that is consistent across income and age brackets.
- Over the course of raising a child from age 0 to 24, the total comes to around $610,000. These numbers can fluctuate and even multiply if you have more than 1 child.
- Childcare, school tuition and college savings. These are other associated expenses that can fluctuate month-to-month.
When you are evaluating a life insurance policy make sure to have a payout sum that is large enough to give your family the financial support they need. You can calculate this by looking at the living standard you want your family to sustain and the current and future costs of raising your kids.
Life insurance if you're an empty nester
It is still important to have life insurance as an empty nester. As you grow older and prepare for retirement, life insurance offers added financial security for your spouse in the form of a lump sum or income protection if you pass away. Life insurance policies often have financial adviser benefits which will help your partner find the best way to use the claim payout.
As this is another stage in your life, it is important to reevaluate the coverage you need and tailor the plan accordingly. Some of the policy options you had when raising children may no longer be necessary and can be cut to save on monthly premiums.
Note: Premiums will increase as you get older and if you develop a medical condition. Also, many life insurance policies are cancelled at ages 70-75, so check with your insurer for specific restrictions.
Rates last updated June 25th, 2017
