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Life insurance for Generation X
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Key takeaways
- Life insurance can help Gen X leave money to cover mortgage payments, daily expenses and education costs.
- Life insurance riders can be added to policies to provide additional protection that may better suit your family’s needs.
- Financial experts usually recommend purchasing 10 to 15 times your annual income in coverage.
Many members of Generation X, born between 1965 and 1980, likely have families to care for now and some may even be beginning to consider retirement. And they, along with those still in the workforce, have many obligations to manage, from marriage and children to a mortgage and other responsibilities that are common in this life stage. However, there’s one responsibility that may slip through the cracks: life insurance. There are a number of options for life insurance for Gen X, and a variety of factors that impact the coverage you’ll be eligible for and what your premiums will cost. Bankrate’s guide on the different types of life insurance for Gen X can help make sense of all the options.
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Whole life insurance combines life insurance with an investment component.
- Coverage for life
- Tax-deferred savings benefit if premiums are paid
- 3 variations of permanent insurance: whole life, universal life and variable life include investment component
Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.
- Fixed premium over term
- No savings benefits
- Outliving policy or policy cancellation results in no money back
This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. HomeInsurance.com LLC services are only available in states where it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Why Gen X-ers needs life insurance
Generation X is in a stage of life that includes numerous important responsibilities. Life insurance may help to provide peace of mind that your loved ones will be taken care of should you pass away.
Gen X, depending on their age at the time, either saw the impact or were directly affected by the financial crisis of 2008, and have continued to face challenges as members of the workforce through the coronavirus pandemic. As a result, some Gen Xers carry a significant amount of debt that could be passed on to their family if unaddressed. Some members of Gen X also don’t expect to receive Social Security benefits, and may want to use a life insurance policy to establish a benefit that will be available to their family after their passing.
Life insurance for Generation X can provide a number of benefits to your family. Should you pass away, life insurance could help your loved ones with:
- Mortgage payments: If you still have a mortgage, a life insurance policy might help your family make the monthly payments if you pass away.
- Daily expenses: Should anything happen to you, your life insurance policy’s death benefit could help your beneficiaries pay the bills.
- Education: Higher education is often expensive. Your life insurance policy could help fund college for your children and might even eliminate the need for them to take out student loans.
It is common for many people to not think about life insurance until they are older, but as Gen X continues to age and build families, it’s a good time for members of this generation to start considering how they will leave their loved ones feeling financially secure.
Types of life insurance for Gen Xers
Generation Xers may have varying life insurance needs. There are several types of life insurance that could help Gen X-ers support their financial goals. When considering what type of life insurance is right for you, there are several factors to consider.
Term life insurance
Term life insurance is a temporary form of life insurance. It typically lasts anywhere from 10 to 30 years, depending on the policy you choose. You can renew your policy, but the premium will be assessed based on your current age and health status, meaning that the price you pay will increase as you get older. Term life insurance policies can be used to help your family cover expenses like childcare. If you have older parents, term policies can be used to help ensure they are taken care of financially upon your passing.
Whole life insurance
Unlike term life insurance, whole life insurance does not have an expiration date. A type of permanent life insurance, your whole life insurance policy will never expire as long as you make the necessary payments to keep your policy active.
Whole life insurance also enables you to accumulate cash value, a feature that term life insurance does not offer. Cash value is an option that many Gen Xers find especially attractive, since it allows you to borrow against the policy or even withdraw money without paying it back, although your death benefit amount may be reduced.
Final expense insurance
Another possible option for Gen Xers is a final expense policy. These are essentially small whole life policies, with death benefits usually less than $25,000, that are designed to take care of end-of-life expenses. Final expense policies generally do not require medical exams and may be a good option if you find yourself unable to obtain other types of life insurance due to health problems.
Life insurance riders for Gen Xers
No matter what type of life insurance you choose, a standard policy may not meet all of your needs. This is where life insurance riders can help. A life insurance rider is an amendment to your life insurance policy that adds extra protections that might better suit your family’s needs. They are typically added to address specific events that you may want coverage for.
There are several kinds of life insurance riders that Gen Xers might want to consider. The ones mentioned here are some of the most commonly available, but your insurer may have additional ones worth considering.
Disability waiver of premium rider
A disability waiver of premium rider could protect you should you become disabled. If you have this option on your policy and suffer a qualifying disability, your premium payments could be waived for the duration of the disability.
Accelerated death benefit rider
An accelerated death benefit rider may allow you to access part of your policy’s death benefit while you are still alive. With this rider attached to your policy, you may be able to receive part of your death benefit if you are diagnosed with a terminal illness.
Long-term care rider
A long-term care (LTC) rider may also enable you to access your life insurance benefits ahead of schedule. When you add this rider to your life insurance policy, you may be able to use the funds to pay for extended medical care, such as a nursing home, private nurse or another type of long-term care.