Let’s talk about insurance you should think about by the time you hit 40 years old. I don’t know about you, but when I hit the big 4–0 I started wondering what types of insurance I needed to effectively cover my family. I really hadn’t spent much time thinking about the specifics. All I know is that we have coverage through an employer program, and it is pretty decent. But I hadn’t done the deep dive to think through all the coverage we had, and might actually need. So when all of a sudden with 40 staring me in the face, two kids, a wife, dogs, and a mortgage, I figure insurance is something we better have all figured out.
So I went on a search for what types of insurance are needed by the time you are 40. Some of them I probably should have carried well before the age of 40. Others I might not need until a little later in life. But the reality is, insurance should be a relatively large part of your overall safety plan going forward.
So let’s take a look at the different types of insurance out there to make sure you and your family are appropriately covered going forward.
Health Insurance
If you’ve been living on the risky side of things up until your 40th birthday, it’s time to change your ways. I don’t know why, but at 40 things just seem to get a little bit more complicated when it comes to health. You most likely have a lot more responsibilities and a lot more things to pay for at this age. So making sure that any major health expenses are covered at least in part by insurance is critical.
It’s also easier than ever to get covered under the Affordable Care Act. It can take some time to find the plan that’s right for you, but there options out there. And the great part is they even cover pre-existing conditions.
Life Insurance
A lot of people receive life insurance, similar to health insurance, through their employer. Often times it just goes overlooked in regard to how much life insurance they actually have. It is important to look at all the factors in your life that should go into calculating the amount of life insurance you need. Often times you’ll find that you need additional life insurance above and beyond what your employer is paying. Think about what would happen if you were the primary money maker in the family and your income were to go away. What would happen to your home? Would your kids have enough money for college? Would your spouse have enough money to pay the daily bills until finding additional work? Going through these calculations is critical to determine the correct amount of life insurance that you actually need.
It’s also important to think about how much insurance a spouse who does not work may need. Many couples just assume the answer to that question is nothing, or a very small amount. But think about daycare, what that spouse may have earned at a future point in life, or if you’d like the working spouse to be able to pay down a mortgage or other debt.
Disability Insurance
Again, along with health insurance, disability insurance is often offered through your employer. If it’s not you should again look to an independent insurance agency or broker for disability insurance. Disability will cover you and the event of an injury or some other event that leaves you unable to work for a short or long term period of time. Making sure you are covered for any event that may leave you in poor health for a period of time is absolutely critical to protecting your family.
Car Insurance
There are lots of reasons these days for people to opt out of owning a car all together. But if you’re one of the majority of adults in this country who owns a car it’s important, and in most cases required, that you have some form of car insurance. Many times, the level of car insurance you need is determined by a state mandated minimum. It’s up to you to decide if you want to carry more than the required minimum’s and make sure that your policy is appropriate for your needs.
Home/renters Insurance
This type of insurance coverage ensures your personal property is protected in the event of an unexpected fire, lightning strike, windstorm, and some other events. If you own your own home it’s likely that your mortgage requires you to carry some type of homeowner’s insurance. If not, you should do it anyways. Renters on the other hand are far less likely to carry insurance. This is a mistake. No matter where you live, the chances of an event affecting your belongings is a possibility and you want to ensure you’re covered. Given the number of companies who offer this type of insurance, going through a broker who can help you find the best price is sometimes a good idea. You can also check with insurance carriers who you already have other coverage through. They may throw you a good deal just to tack on an additional policy.
Supplemental Insurance
This one is totally optional, but something you should be thinking about. It’s exactly what it sounds like. Insurance designed to give you more coverage above and beyond and existing policy. These policies are completely optional and something you should consider after fully understanding the other policies you have. If you think you’re under insured on any of these plans and have a low risk tolerance for potential issues, supplemental insurance is something you should consider.
As with many types of insurance, supplemental plans cover all different types of things including dental, disability, travel, and many more. You can also purchase supplemental insurance policies to cover specific diseases and conditions. You need to pay close attention to the policy that you’re purchasing since they can be complex. Make sure you fully understand what you are getting in the policy.
The Bottom Line
When we’re younger, insurance isn’t necessarily in the forefront of our minds. And that’s understandable since we don’t face as many health issues and we don’t have as many responsibilities. But as you get older, most people have assets and/or families to protect. It’s important to continue growing assets, but it’s also critical to provide protection in the event of something unexpected.
Take the time to review your insurance profile with an insurance agent or a trusted financial planner. These people can help you understand the total picture and what insurance you might need. Also remember that many insurances will go up in cost as you get older. This makes it important to purchase some insurance, such as term life, earlier rather than later. Your health is important too, since some policies won’t be available, or may be too expensive if you have existing health issues.
It’s very easy to delay, especially on some optional coverages. But it’s worth the peace of mind, so get out there and make sure you are appropriately covered.