Understanding Your Insurance Needs at Every Life Stage­­

I get it—life insurance isn’t exactly a thrilling topic. But if there's one thing I’ve learned in financial planning, it's that the right insurance at the right time can be life-changing. Whether you're just starting out, growing a family, or thinking about retirement, your insurance needs will evolve. Here is a break down of when you might need insurance, how much, and what type fits best for your situation

Stage 1: Single and Building Your Career (30 Years Old)

Situation: You’re working full-time or building a business, have no dependents, and might be considering buying a home in the future.

Insurance Need: Minimal or none—at this stage, there’s no financial dependency on you. However, if you’re planning major financial commitments, you could consider term insurance to lock in lower premiums and ensure future insurability.

Key Factors: Do you have debts (e.g., student loans, car loans) that someone else would be responsible for?

Do you want to secure insurability in case of future health issues?

Are you planning to buy a home soon?

Stage 2: Growing Family & Mortgage (40 Years Old)

Situation: Married with children (5-10 years old), mortgage, and other financial obligations.

Insurance Need: High—Your family depends on your income. A term life policy that covers your mortgage, education costs for kids, and living expenses in case of premature death can be crucial.

Key Factors: What’s your remaining mortgage balance?

How much income replacement would your spouse need?

Do you want to ensure your kids’ education is covered?

How much in liquid assets do you already have?

Stage 3: Kids Growing Up, Mortgage Almost Paid (50 Years Old)

Situation: Your spouse is a successful business owner, and you’re a stay-at-home parent. One child is independent, and another is still at home. Mortgage is almost paid off.

Insurance Need: Moderate to Low—Your spouse’s income is strong, but if something happened to them, ensuring continuity in your financial plans might be necessary. Term insurance can provide coverage until retirement.

Key Factors:

What’s the plan if your spouse passes away?

Do you still have debts or obligations?

If you're a stay-at-home parent, who would take over your role, and what would the costs be?

Stage 4: Approaching Retirement (60 Years Old)

Situation: Retirement is near, with $2.5M in investments. You want to leave money to charity and family tax-efficiently.

Insurance Need: Strategic Use—Estate planning and tax efficiency become primary concerns. Permanent insurance (whole life) might make sense for wealth transfer, or a term policy could hedge against early death and a large tax bill on registered accounts.

Key Factors:

What’s the expected tax burden at death?

Would life insurance help leave more tax-free wealth to heirs or charity?

What are your liquidity needs in retirement?

Final Thoughts

Life insurance isn’t one-size-fits-all. Your needs depend on your life stage, financial commitments, and long-term goals. If you’re unsure about your coverage needs, book a free financial review with us to get a personalized assessment.

­Book a free consultation­

Guillaume Girard, CFA CFP | Sam Lichtman, CFP
Millen Wealth Advisors

P.S. Have questions? Reply to this email, and we’ll cover them in an upcoming episode of the Millennial Money Canada podcast!

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