When to buy life insurance

Life insurance can play an important role in a well-rounded financial plan, offering protection and peace of mind for the people who matter most to you. While needs may vary over time, purchasing coverage can be a smart decision at nearly any age. Here are some key considerations at different stages of life, along with common life insurance myths and why life insurance can be a valuable part of your financial strategy throughout each one.

Can you get life insurance at any age?

Life insurance is available at nearly any age, though options and costs can vary depending on age and health. In general, the younger and healthier a person is, the more affordable and flexible their coverage options may be. However, life insurance can still be a valuable tool later in life.

Different life stages bring different priorities. Younger adults may consider life insurance to cover student loans or provide financial support for loved ones. As families grow, coverage can help protect dependents and obtain future financial needs, such as childcare costs or covering the rent or mortgage. Later in life, life insurance may serve to help cover final expenses, leave a legacy, or assist with estate planning. Understanding how life insurance fits into each stage of life can help guide more informed financial decisions.

How much life insurance do I need?

The amount of life insurance needed generally depends on how much money would be required to cover final expenses, pay off debts, and help support dependents in your absence. Meeting with a financial professional can help determine life insurance needs and explain how to calculate coverage amounts. It's important to think about both current needs and future responsibilities when making decisions about life insurance and ensure the chosen coverage is a good fit for your overall financial goals.

What life insurance policies are available?

There are two main types of life insurance policies: term and permanent. Term life insurance is an affordable protection that provides coverage for a set period of time, such as 10, 20, or 30 years, and typically features a set, level premium amount for the duration of the term. These policies offer a generally tax-free death benefit for beneficiaries.

Permanent life insurance typically costs more than a term life policy and offers lifelong coverage as long as required premiums are paid. These policies may have the potential to build cash value where the policyholder can access this money¹ to help supplement their retirement income, cover emergency medical bills or assist with other financial needs.

Life insurance myth: Young adults don’t need coverage

A common misconception is that life insurance isn’t necessary for young adults. In reality, purchasing coverage at a younger age often means lower premiums due to better health and fewer medical concerns, making the risk lower for insurance providers. Buying life insurance early, even a small policy, can lock in affordable rates and provide protection when it’s needed most.

Benefits of life insurance for young adults

Term life insurance can be an excellent choice for most life insurance shoppers in their 20s because it's often simple and affordable. For someone on a tight budget, term life insurance may be a good match. Even a small policy can provide a great starting point, allowing a person to revisit their coverage as life changes, such as having children, getting married, or being promoted. More benefits of life insurance for young adults can:

• Financially protect loved ones
• Provide funds for funeral expenses
• Help beneficiaries pay off debt, whether a mortgage, credit card, or a student loan
• Offer lower coverage rates

Do you need life insurance if you are single?

It’s a common belief that single individuals don’t need life insurance, but there are several reasons to consider having coverage. With the average funeral costing over $7,800, final expenses can be expensive for the people left behind. Life insurance can help ease the financial burden on loved ones. A death benefit can also help beneficiaries pay off remaining debts or medical bills. In some cases, a permanent life insurance policy may offer access to cash value that can be used during an insured’s life to help meet future financial needs.

Life insurance for families

For individuals or couples raising children or managing household expenses, life insurance often becomes a key part of financial planning. At this stage, financial responsibilities tend to increase—such as a mortgage, child care, and daily living costs—which makes having adequate coverage especially important. Those who already have a policy may find it helpful to review their coverage to ensure it still meets current needs.

When determining how much life insurance may be needed, it’s helpful to look at the full financial picture. Consider the cost of raising a child, including education, health care, and daily needs, as well as ongoing cost of living for family members. Also factor in monthly bills and fixed expenses, like mortgage or rent, utilities, and transportation. Ask yourself, does my income help with necessities like food and medical costs? Are there other long-term financial needs, such as saving for college or supporting aging parents? Having the right type and amount of life insurance coverage can help ease these financial burdens and offer loved ones with greater peace of mind.

Benefits of buying life insurance as a family

• Helps ensure beneficiaries do not take on debt, like the mortgage, credit card debt, or a student loan
• Can provide protection for a spouse or partner who relies on the insured’s income
• Assists with childcare expenses
• Can provide money for funeral expenses

Life insurance for empty nesters

Our needs and financial priorities generally change as we get older. For instance, you may no longer have children living at home, but they may still rely on some level of financial support. You may also have a growing interest in preserving assets or leaving a legacy for loved ones. Although life insurance typically becomes more expensive with age, coverage can still be affordable and a valuable addition to a financial plan.

For those who have life insurance through work, now may be a good time to review the coverage, make any adjustments, and consider adding additional insurance. Workplace life insurance is a good place to start, but it may not provide enough coverage to meet all of your family’s needs. Plus, these types of policies usually don’t carry over when changing jobs.

During these years, it can be a good time to review existing coverage, consider making adjustments, and explore options like permanent life insurance. Permanent policies may offer benefits such as potential cash value growth opportunities, which can provide greater flexibility when it comes to saving for retirement and estate planning. Life insurance at this stage can serve more than just protection; empty nesters can use it as a strategic financial tool with long-term benefits.

Benefits of buying life insurance as empty nesters

• Helps prevent financial hardship for beneficiaries who have to pay their debt on a mortgage, credit card, etc.
• Offers financial support to spouse or partner who relies on insured’s income
• Can provide education funds for children
• Helps cover final expenses
• Can provide an inheritance for loved ones
• Offers a way to pay for estate taxes

Life insurance policies for seniors

Many people wonder when to buy life insurance as they get older. Life insurance remains a valuable option later in life and can be a smart way for seniors to help protect and provide for their loved ones. This can also be a good time to reassess financial goals and priorities and check if any existing coverage aligns with current needs. Purchasing a term life insurance policy could be a good, inexpensive option. While the primary purpose of life insurance is death benefit protection that can be used to financially support beneficiaries, there can also be living benefits.

For example, permanent life insurance can play a role in retirement planning. If retirement savings fall short of goals, the cash value in a permanent life insurance policy can help close income gaps. This could reduce the need to withdraw as much from retirement accounts, which are usually taxed as regular income.² Plus, taking income from retirement accounts and life insurance policy could help keep you in a lower tax bracket.

Beyond supplementing income, life insurance can also offer several additional benefits during retirement. These advantages can help strengthen an overall financial strategy and offer peace of mind for the future.

Benefits of life insurance for retirement income

• Helps cover outstanding debts or ongoing expenses for loved ones
• May pay for medical bills or other final expenses
• Offers a way to pay for estate taxes
• Can provide a legacy or inheritance for beneficiaries
• Helps with retirement planning

Talk to a Midland National financial professional for life insurance at any age

Life insurance can fit into any life stage, making it a valuable part of a well-rounded financial strategy. No matter your age or life situation, speaking with a financial professional about your individual needs and long-term goals can help provide clarity on which solutions may be the best fit. With the right plan in place, life insurance can offer lasting protection, support financial goals, and bring added peace of mind for the future.

Whether it’s protecting loved ones, supplementing retirement income with annuities, building a financial legacy, or a combination of these goals, thoughtful financial planning can offer greater stability and peace of mind for the road ahead.

^1.Policy loans from life insurance policies generally are not subject to income tax, provided the contract is not a Modified Endowment Contract (MEC), as defined by Section 7702A of the Internal Revenue Code. A policy loan or withdrawal from a life insurance policy that is a MEC is taxable upon receipt to the extent that the contract's cash value exceeds the premium paid. Distributions from MECs are subject to federal income tax to the extent of the gain in the policy, and taxable distributions are subject to a 10% additional tax before age 59½, with certain exceptions. Policy loans and withdrawals will reduce cash value and death benefits. Policy loans are subject to interest charges. Consult with and rely on your tax advisor or attorney for your specific situation.

^2.Neither Midland National nor its agents give legal or tax advice. Please consult with and rely on a qualified legal or tax advisor before entering into or paying additional premiums for such arrangements.

Life insurance policies have terms under which the policy may be continued in effect or discontinued. Permanent life insurance requires monthly deductions to pay the policy’s charges and expenses, some of which will increase as the insured ages. These deductions may reduce the cash value of the policy. The current cost of insurance rates and current interest rates are not guaranteed. Therefore, the planned periodic premium may not be sufficient to carry the contract to maturity. For costs and complete details, refer to the policy or call or write Midland National Life Insurance Company, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193. Telephone 800-923-3223.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

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