While it goes without debate that having a life insurance policy is of paramount importance, is it perhaps even more important to know which insurance policy to choose at any given stage of life. There are many insurance policies that you can choose from. There is no one-size-fits-all when it comes to life insurance, and your personal requirements at any life stage determine which insurance product you should purchase. Your requirements depend on factors such as family circumstances, financial conditions, career success, and so on.
Getting started
When you are just getting started in life, you might have very fewer responsibilities. Not only that, but this is also the stage in life where you are young and in the prime of your health. You also have time on your side, and you can change your plans if need be. In this stage of life, you need to invest in a term life insurance. This is not only because the life insurance premium is less expensive, but also provides more flexibility. You can also look for more flexible insurance policies to increase coverage for future life stages.
Professional stage
As you grow slightly older, you become more career-focused and begin to take up responsibilities. You might start contributing to your family’s finances and begin to move up in the professional ladder. With increasing income, you can now increase cover in your life insurance policy and opt for adequate life and health coverage. This is the stage in life wherein it is a good time to start long-term investment plans. Since you have more income and risk appetite, you can invest in options such as unit-linked insurance plans (ULIP).
Getting married
Once you get married, you have a new set of responsibilities that you need to fulfil. This is because you now have an additional person to take care of. It is the absolute right time to start growing your wealth and start looking for long-term wealth plans. You also need to modify your term plans and health coverage and also purchase sufficient cover against critical illness. And even though retirement is far away, this is still a good time to start planning for your old age. You can start early and begin to invest in retirement plans as well.
Having children
Starting a family is something that requires financial planning. With the birth of children, there are new responsibilities that demand attention. It would be best if you refocused your plans to secure the financial future of your kids. Start with a child insurance plan to cover your children’s education once they start with pre-school. Also, purchase additional life cover and tweak your existing health insurance plan to include your kids. Additionally, if you have a home loan during this life stage, then consider re-assessing your term cover.
Mid-life
As you reach the middle age and achieve professional stability, you need to keep aside money for unexpected needs and family requirements. In this ‘plateau’ phase, you can consider creating a second source of income. You can do this by availing shorter-term savings plans or through income plans. Also, make sure that you top up your health and term protection. This is because as you grow older, usually after the age of 45, life insurance premium becomes more expensive as they require more health examinations and check-ups.
Retirement
These are the golden years of your life where you are finally free to slow down and smell the roses. It is also a golden opportunity to secure guaranteed income for the rest of your life. You can create secure income streams through annuity plans or more flexible unit-linked plans. It would help if you also realigned your portfolio in your existing investment plans, to ensure that you are not exposed to market fluctuations during the time of maturity. Also, regardless of your employment status, make sure that you continue your health coverage.
As a rule of thumb, insurance can be taken at every stage of life and no time is late to buy an insurance cover for yourself and to secure your family’s future.
