Personal Finance 101: Generation X – You Just Turned 40: Last Time To Get Life Insurance?

Generation X is classically defined at people born between the years 1965 and 1979.    Pretty much those of you in your early 30’s to the mid 40’s.  However, having given personal financial advice to thousands of people, I can tell you that many of you who were born 1960 to 1964 fit within the Generation X type of financial and personal attitude.

In the last six months, I’ve seen both friends and family who are in the 40 to 45 year old range dealing with major medical issues.   I’m 42 and when people told me about 10 years ago the aches in my joints would be just a little bit worse . . . well I hate to admit but they were correct.    Recently, I had three different people I know who drove themselves down to the emergency room thinking that they might be having a stroke or heart attack.    I know three different people who were diagnosed with some type of cancer that they are currently treating.    I also know of two separate cases where friends who found out they have diabetes.    In your 20’s, you never really had to worry about this kind of stuff.   In your 30’s you start to feel it a little bit here and there.   But, in your 40’s is where you start to see some of the more major stuff.

I thought this article would be really important because when it comes to financial planning and life insurance, it may be difficult to potentially impossible to apply to get new life insurance if you have something that happens to your body that would cause you to be uninsurable.  Or, you have something happens that would allow you to get insurance but the costs would be unaffordable in your budget.   This is why if you are in your late 30’s or early 40’s it may be a great time to sit down and review your life insurance needs.

Many people seem to be confused around their options and how they can buy the protection.   Before you purchase life insurance, make sure to always have a discussion of your goals followed by an analysis so you can figure out the right amount of insurance you need.  This is important because most Gen X’ers are massively UNDERINSURED.     Realize that if you buy a $1,000,000 term insurance policy today, in 20 years that $1,000,000 will only be worth $500,000 20 years from now.   Here are some thoughts around life insurance consideration for those of you who are in that early 40’s range.

  • 1) WHATEVER AMOUNT YOU COME UP WITH INITIALLY, BOOST IT HIGHER –   A lot of Gen X’ers get their term insurance coverage through the workplace, and I think the trends show that many Gen X’ers will change jobs many times before they reach their final place of work.   You should not depend at ALL on the work place life insurance as part of what you need.    With outside coverage, many Gen X’ers arbitrarily buy something like $250,000 or $500,000 of life insurance to ‘cover the mortgage’.    I’m going to tell you that for most Gen X’ers, less than $1,000,000 is likely to little insurance, but for those of you with incomes over $100,000 a year, the life insurance number is more in the several million range than a flat $1,000,000
  • 2) MAKE SURE YOUR TERM INSURANCE IS CONVERTIBLE  (for 10,20, or 30 years)- Insurance companies generally play on a bingo board.  What this means is that depending on your age, health, etc. there are particular companies that price their term insurance product to win that space.  If you buy term insurance, your insurance agent should be able to show you 5 to 10 different carriers.   If you are buying the term insurance product from a proprietary agent, odds are you aren’t getting the best deal and that is where they make their best commission.    Most of the level term insurance policies do have a clause that allows you to convert these to a permanent policy without evidence of insurability.  That’s the key part to the equation.   If your term insurance isn’t convertible, you could run the risk of becoming uninsurable down the road and still needing insurance coverage.
  • 3) GET SOME TYPE OF PERMANENT POLICY – People avoid buying permanent insurance because they think it costs too much, they don’t understand it, or they read somewhere on the internet that it doesn’t make sense.    Suze Orman says so which must make it true.    With permanent insurance there are various types of product structures, cost structures, and companies that are engaged in selling these products.  You should do your homework to figure out which type makes the most sense for you, but what should be true for most of you in that early 40’s range is that getting some type of permanent policy will ensure you have insurance coverage for life.

Most people don’t go home at night or wake up in the morning thinking about how much life insurance they need.  Most people think that nothing is ever going to happen to them, but I think in your early 40’s you can start to see things happening to people around you as I have seen in the past six months.    Smart financial planning means not only looking at your overall financials, but assessing what types of coverages you will need at different ages in life.   Make sure to always consult an independent insurance agent who can represent many carriers or pay a fee-based insurance advisor to help guide you through this difficult maze of insurance decisions.

Go to www.oxygenfinancial.net to request a consultation with the leading experts for Generation X in the country.

Written by:

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®

Co-CEO and Founder of oXYGen Financial, Inc – The Leaders in Gen X & Y Financial Advice

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS. NFPAS does not provide tax or legal advice.   This site is published for residents of the United States only. Registered Representatives and Investment Advisor Representatives of NFP Advisor Services, LLC (NFPAS) may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact NFPAS Compliance Department at 512-697-6000.   PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. NFP Advisor Services, LLC makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is NFP Advisor Services, LLC liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves

Hey!

My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

Read More About Ted Here

Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

Background and qualification information is available at FINRA's BrokerCheck website.

One Comment

  • May 4, 2012

    The permanent insurance thing is tough. Right now, we carry over a million dollars in term insurance, which would more than care for our daughter. It’s a great deal, but I just can’t see how we can swing the permanent with our budget being what it is.

Leave a Comment