Life Insurance for younger folks

It’s never too early to start planning life insurance, here’s why.

Many of my past articles deal with estate planning, retirement planning and charitable giving. Typically the audience for these topics are those of us with graying or thinning hair. In this edition I’d like to write about the importance of life insurance for the younger family. Of all the age groups that are defined demographically, this group probably has the biggest need for immediate planning both for protection and for the “what ifs” that are a large part of a young family’s life.

The definition of a young family is that group of people between the ages of 20 and 40 with children between the ages of newborn and post-college age. When we meet with this group we typically hear comments like, “Why do I need to plan, we’re so young,” “I’ve got plenty of time to take care of that,” or “my spouse is young enough, he/she can just work.” All valid comments on the surface but as we talk with this age group we find that it is never too young to start. That is why our Sales Representatives usually lead with a quick education regarding the importance of developing a good, sound estate and insurance plan.

When we talk about protection using life insurance we first help determine the actual needs of life insurance for this group. Rather than “guessing” about the appropriate amounts needed we use a formula that helps show the young families exactly why and how much life insurance they might require to take care of their spouse and children. That formula is based on various immediate cash needs that would be presented upon a spouse’s untimely death. Some of those immediate needs for cash when a spouse dies are:

1. Funeral and Last expense costs such as medical bills, taxes due and attorney fees
2. Mortgage or rent payment fund to continue to pay outstanding mortgage or pay monthly rent
3. Outstanding debts (other than mortgage) like credit cards, student loans and car loans
4. Child Care fund to help pay for daycare and/or after-school care
5. Education fund to have a “pot of money” available to help with post high-school education
6. Income Replacement to help supplement or replace the deceased partners’ income

…when we meet with this group we typically hear comments like, “Why do I need to plan, we’re so young,” “I’ve got plenty of time to take care of that,” or “my spouse is young enough, he/she can just work.” All valid comments on the surface but as we talk with this age group we find that it is never too young to start. 

Once the Sales Representatives help a family identify and discuss these various needs, they come up with a total amount of life insurance needed. They then subtract off any existing insurance and immediate cash to come up with a total life insurance need for both husband and wife. This number represents the amount needed to take care of the above items for a surviving spouse. Probably the biggest question for a young family at this point is “How can we come up with this large number if one of us dies?” The answer is life insurance!

Through the use of life insurance we can create a large amount of money when it’s needed the most for a fraction of that actual amount needed. Our Sales Representatives discuss the various types of insurance used and which will best fit the budget, needs and goals of the young families they are helping.

If you are young or old, have children or grandchildren, or have a young family, please consider the importance of making sure that if a young parent would die prematurely, there are sufficient monies available to allow the surviving spouse and family to continue to live the lifestyle they are accustomed to living. Remember, when a young parent dies the survivors suffer a huge emotional hardship. Let’s make sure, through the help of a Catholic United Sales Representative, that the survivors don’t have to also take on the additional financial burdens of worrying where the money is going to come from.

Whenever you want more information on this topic or others, your local Catholic United Sales Representative should be your first resource for assistance.

May God Bless you and your families…