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Your needs change as you go through life, and it's important to know what the best life and health insurance coverages are for any given age and stage of life.
Life Insurance
Life insurance is insurance coverage that pays a death benefit to your survivors when you die. It ensures that your spouse or children would be able to continue enjoying the lifestyle you've built even after your income is gone. Life insurance is easiest to get when you are young and healthy and becomes more expensive and more difficult to obtain as you age or develop chronic conditions.
Health Insurance
Health insurance pays a portion of the medical costs you incur. There are a variety of insurance types providing different levels of coverage to meet your needs. Your health insurance needs will change over time, but to make sure you always have the best possible coverage, it is important not to have gaps in your coverage.
Choosing Coverage in Your 20s
Many people in their 20s take whatever health insurance is offered by an employer or university or simply do without insurance. However, going without insurance can be extremely risky. Even if you are not yet raising a family, there is no predicting when you might beome injured or disabled and need good quality medical coverage. If you're in your 20s, planning for your future now can save you a lot of money later.
Make sure you have adequate health insurance. If you change jobs and lose your insurance, buy a gap policy so that you don't have any gaps in your coverage. This will protect you so that any subsequent insurance companies have to cover preexisting conditions. When choosing life insurance, now is the best time to buy a whole life policy, which builds cash value as long as you pay into the policy.
Coverage in Your 30s and 40s
By the time you are in your 30s, you are probably more stable in your career and have decent benefits provided by your employer. If you don't have life insurance, you should certainly invest in a policy. A great policy choice is universal life. A universal life policy provides a long term investment opportunity that allows you to defer some of your income and prevent it from being taxed.
This is also a good time to make sure you have long term care insurance added to your health insurance policy. It's less expensive to buy long term health insurance while you are still relatively young and healthy, but if something happens later and you become chronically ill, you'll appreciate this coverage.
Coverage in Your 50s and Beyond
As you begin to think about working less and enjoying time with grandchildren more, even if your retirement is a decade away, now is the time to start planning for your golden years. If you don't yet have a plan in place, it's time to start talking to your insurance agent about a term life policy. A term life policy provides a death benefit that will pay off your debt in the event of your death, leaving your family in a position to survive without your income without the risk of losing your home or assets.
You should also begin analyzing the adequacy of your health insurance coverage for things like long term illness, chronic conditions, surgeries, and nursing home or hospice coverage. The more you do to protect yourself now, the less burden you will place on your dependents to do it for you.
