Reasons to Own Life Insurance in Every Decade of Your Life
With competing financial priorities throughout your lifetime, it could be easy to overlook life insurance, especially in your younger years. But life insurance is a vital tool in your lifelong financial wellness journey.

There has always been value in protecting your loved ones, perhaps even more now as the COVID‑19 global pandemic continues to devastate households and put the question of mortality front and center. While life insurance can be an unsettling topic, and it’s not exactly stimulating dinner conversation, it can be a vital stepping-stone to financial health.
In fact, life insurance plays a role beyond times of uncertainty and is an evergreen financial tool that may benefit your plans at any age. That’s because life insurance does more than just provide survivor benefits; it is a dynamic tool that can work throughout your life alongside your savings and investment strategies.
So, it may be surprising that, despite its importance and increased ease of access, only 59% of Americans have life insurance and about half of those are underinsured, according to LIMRA, a financial services research and consulting organization. In fact, for millennials and Gen Xers, life insurance is usually among the lowest financial priorities, according to LIMRA’s 2019 Insurance Barometer Study.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here’s how life insurance benefits you differently in each stage of your life.
1. In your 20s: The foundation for financial success
Entering the workforce and preparing for the future can be intimidating when you’re just starting out. It’s important to remember that a good financial plan should include savings and investment vehicles like an IRA or a 401(k) plan, along with life insurance to protect those savings and ensure debts can be paid. Even if you’re single, or don’t have any children, there are reasons to consider life insurance. You might want to think about life insurance if, for example, you’ve co-signed a student loan with your parents or others, or if you want to make sure there’s enough money for your parents’ long-term care, or even if you’re an entrepreneur and getting your business off the ground.
2. In your 30s: Major life changes
Getting married, buying a house, having children, seeking promotions—these life changes are more apt to happen in your 30s. They provide more reason for you to build financial health, to cover the costs of these changes while still keeping an eye on future needs. Changes like these also require more protection, including that which is provided by life insurance—particularly at this age when life insurance remains very affordable. It’s often during this decade that many of us start a family, and while expectant parents often feel financially pressed, it’s important to think about how life insurance protects a young family and contributes to financial security.
3. In your 40s: Some alterations may be required
Those clothes you wore in your 20s? They probably won’t fit you in your 40s without some alterations. So too with your financial plan. What your goals were as a young adult most likely changed over time. This is the right time to gauge whether you’re saving enough, or if your life insurance coverage is still what’s needed. According to the National Association of Insurance Commissioners, people at this age often begin to ignore their policies, so it may be important to periodically review and update your coverage to reflect changes in your financial situation and family composition.
4. In your 50s and early 60s: Eyes on the prize
For many in this age span, the kids are grown, the house is paid for, and retirement is on the horizon. But that’s not the case for everyone. Some might have had children later in life, others who have been impacted by economic changes might have had several jobs during their careers, and still others might be facing health-related issues. Options for saving and investing are different in this age cohort because of these and other variables, and those options are also different with regard to using life insurance for such things as estate tax payment, retirement income replacement and business succession.
5. 65+: Goals have changed
As people reach age 65 and beyond, that financial plan begun in young adulthood should be yielding benefits. But with so many unexpected changes that you can encounter throughout life, there still should be financial plans in place that include retirement income, the potential for full- and part-time employment income, and Social Security benefits. Life insurance can play a role in an overall financial strategy, protecting surviving beneficiaries from any debts, estate taxes and funeral and burial costs.
While life insurance may have been put in the spotlight because of the COVID-19 pandemic, its importance is evergreen. Regardless of where you are in your financial wellness journey — whether you’re just starting out or nearing retirement — life insurance can be an important part of a holistic financial plan.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Salene Hitchcock-Gear is president of Prudential Individual Life Insurance, a business unit of Prudential that offers competitive solutions to meet the needs of consumers through the manufacturing and distribution of a diverse portfolio of life insurance products. An insurance industry veteran with more than 30 years of experience, Hitchcock-Gear joined Prudential in 2017 as chief operating officer of Prudential Advisors, the Company’s national sales organization with more than 3,000 financial professionals, advisors and fee-based financial planners who offer clients a broad range of financial solutions. She became president of the Individual Life Insurance business in 2018.
-
What the Senate's Vote to Repeal CFPB Bank Overdraft Fees Cap Means For You
The Senate voted to overturn the Consumer Financial Protection Bureau's cap on overdraft fees. Here's what you need to know.
By Sean Jackson Published
-
Ask the Editor: Four Reader Tax Questions
Ask the Editor In our new Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter Editor, answers questions related to filing of tax returns and paying taxes.
By Joy Taylor Published
-
Retiring With a Pension? Four Things to Know
The road to a secure retirement is slightly more intricate for people with pensions. Here are four key issues to consider to make the most out of yours.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
How to Teach Your Kids About the Tax Facts of Life
Taxes are unavoidable, so it's important to teach children what to expect. Also, does your child need to file a tax return for 2024? Find out here.
By Neale Godfrey, Financial Literacy Expert Published
-
Revocable Living Trusts: The Good, the Bad and the Ugly
People are conditioned to believe they should avoid probate at all costs, but when compared with living trusts, probate could be a smart choice for some folks.
By Charles A. Borek, JD, MBA, CPA Published
-
How to Plan for Retirement When Your Child Has Special Needs
When your child has special needs, your retirement plan should include a plan for when you'll no longer be able to care for them yourself. A five-step guide.
By Christopher M. Butterworth, ChSNC®, CRPS, CLU® Published
-
Tax Advantages of Oil and Gas Investments: What You Need to Know
Tax incentives allow for deductions and potential tax-free earnings — benefits accessible only to accredited investors in small producer projects.
By Daniel Goodwin Published
-
Charitable Contributions: Five Frequently Asked Questions
Make the most of your good intentions by understanding the ins and outs of charitable giving. A good starting point is knowing what's deductible and what isn't.
By Stephen B. Dunbar III, JD, CLU Published
-
Financial Leverage, Part Two: Don't Say We Didn't Warn You
A lesson in how highly leveraged investments can benefit the first movers and crush the next round of buyers.
By Stephen P. Harbeck Published
-
Taxes in Retirement: What ESOP Participants Need to Know
Most Employee Stock Ownership Plans (ESOP) participants transfer company stock to an IRA starting around age 55, so taxes on that money have been deferred.
By Peter Newman, CFA Published