Your need for life insurance changes as your life changes. When
you're young, you typically have less need for life insurance, but that changes
as you take on more responsibility and your family grows. Then, as your
responsibilities once again begin to diminish, your need for life insurance may
decrease. Let's look at how your life insurance needs change throughout your

Footloose and fancy-free

As a young adult, you become more
independent and self-sufficient. You no longer depend on others for your
financial well-being. But in most cases, your death would still not create a
financial hardship for others. For most young singles, life insurance is not a

Some would argue that you should buy
life insurance now, while you're healthy and the rates are low. This may be a
valid argument if you are at a high risk for developing a medical condition
(such as diabetes) later in life. But you should also consider the earnings you
could realize by investing the money now instead of spending it on insurance

If you have a mortgage or other loans
that are jointly held with a cosigner, your death would leave the cosigner
responsible for the entire debt. You might consider purchasing enough life
insurance to cover these debts in the event of your death. Funeral expenses are
also a concern for young singles, but it is typically not advisable to purchase
a life insurance policy just for this purpose, unless paying for your funeral
would burden your parents or whomever would be responsible for funeral
expenses. Instead, consider investing the money you would have spent on life
insurance premiums.

Your life insurance needs increase
significantly if you are supporting a parent or grandparent, or if you have a
child before marriage. In these situations, life insurance could provide
continued support for your dependent(s) if you were to die.


Going to the chapel

Married couples without children
typically still have little need for life insurance. If both spouses contribute
equally to household finances and do not yet own a home, the death of one
spouse will usually not be financially catastrophic for the other.

Once you buy a house, the situation
begins to change. Even if both spouses have well-paying jobs, the burden of a
mortgage may be more than the surviving spouse can afford on a single income.
Credit card debt and other debts can contribute to the financial strain.

To make sure either spouse could carry
on financially after the death of the other, both of you should probably
purchase a modest amount of life insurance. At a minimum, it will provide peace
of mind knowing that both you and your spouse are protected.

Again, your life insurance needs
increase significantly if you are caring for an aging parent, or if you have
children before marriage. Life insurance becomes extremely important in these
situations, because these dependents must be provided for in the event of your


Your growing family

When you have young children, your life
insurance needs reach a climax. In most situations, life insurance for both
parents is appropriate.

Single-income families are completely
dependent on the income of the breadwinner. If he or she dies without life
insurance, the consequences could be disastrous. The death of the stay-at-home
spouse would necessitate costly day-care and housekeeping expenses. Both
spouses should carry enough life insurance to cover the lost income or the
economic value of lost services that would result from their deaths.

Dual-income families need life
insurance, too. If one spouse dies, it is unlikely that the surviving spouse
will be able to keep up with the household expenses and pay for child care with
the remaining income.


Moving up the ladder

For many people, career advancement
means starting a new job with a new company. At some point, you might even
decide to be your own boss and start your own business. It's important to
review your life insurance coverage any time you leave an employer.

Keep in mind that when you leave your
job, your employer-sponsored group life insurance coverage will usually end, so
find out if you will be eligible for group coverage through your new employer,
or look into purchasing life insurance coverage on your own. You may also have
the option of converting your group coverage to an individual policy. This may
cost significantly more, but may be wise if you have a pre-existing medical
condition that may prevent you from buying life insurance coverage elsewhere.

Make sure that the amount of your
coverage is up-to-date, as well. The policy you purchased right after you got
married might not be adequate anymore, especially if you have kids, a mortgage,
and college expenses to consider. Business owners may also have business debt
to consider. If your business is not incorporated, your family could be
responsible for those bills if you die.


Single again

If you and your spouse divorce, you'll
have to decide what to do about your life insurance. Divorce raises both
beneficiary issues and coverage issues. And if you have children, these issues
become even more complex.

If you and your spouse have no
children, it may be as simple as changing the beneficiary on your policy and
adjusting your coverage to reflect your newly single status. However, if you
have kids, you'll want to make sure that they, and not your former spouse, are
provided for in the event of your death. This may involve purchasing a new
policy if your spouse owns the existing policy, or simply changing the
beneficiary from your spouse to your children. The custodial and noncustodial
parent will need to work out the details of this complicated situation. If you
can't come to terms, the court will make the decisions for you.


Your retirement years

Once you retire, and your priorities
shift, your life insurance needs may change. If fewer people are depending on
you financially, your mortgage and other debts have been repaid, and you have
substantial financial assets, you may need less life insurance protection than
before. But it's also possible that your need for life insurance will remain
strong even after you retire. For example, the proceeds of a life insurance
policy can be used to pay your final expenses or to replace any income lost to
your spouse as a result of your death (e.g., from a pension or Social
Security). Life insurance can be used to pay estate taxes or leave money to