Life planning is an essential element of every individual. Life insurance is one of the key components of life planning, but many families and individuals have challenges going about the financial complexities it entails. Many buy polices after doing a faulty analysis of their needs, consequently underestimating the value of what they need coverage for. They end up paying expensively for the coverage that they get. The Kiplinger article argues that the kind of policy that one buys should be informed by their needs which keep changing as they age, hence the need for continued review in the attempt to reap maximum benefit.
The article examines the various stages and needs of a person’s life. It describes how financial security can be provided through life insurance policies at the different stages. The amount of life insurance needed is dependent on the responsibilities that the individual has, increasing with increasing responsibilities.
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A married person aged 30 years with young children and a mortgage will, for instance, need more life insurance cover for himself and his wife (Lankford, 2018) . This is because in the event that anything incapacitating happens the policy buyer, the other spouse will have to continue taking care of the children, regardless of their employment or income status. Furthermore, they will need a supplementary income to their own, if they at all have an income, as they rebuild and develop their income source, perhaps a career or a business.
The objective of obtaining a life insurance policy is to ensure that the surviving beneficiaries are provided with enough financial facilities to cater for their needs and fill the financial void left by the deceased person. This is why life insurance needs begin on a high and remain at a high as long as there are people depending on the policy buyer for their financial needs. It drops dramatically following the exit of beneficiaries, either through completion of college or some other form.
Careful planning is important when buying a life insurance policy. It is critical that the needs of beneficiaries are considered before the choice of policy and amount is made. Getting rid of life insurance after beneficiaries exit the stage is not advised. This is because the policy can be reviewed and the terms changed to serve other needs.
References
Lankford, K. (2018, August). Guide to Buying Life Insurance at Every Stage of Life. Retrieved Oct 13, 2018, from Kiplinger's Personal Finance: https://www.kiplinger.com/article/insurance/T034-C000-S002-buying-life-insurance-at-every-life-stage.html
