Insuring Life’s Journey: Tailored Insurance Solutions for Every Age and Stage

The types of insurance you need can vary depending on your life stage, financial situation, and personal circumstances — whether you are single or married with children, rent, or own a home, are employed or retired.

It’s required by law in most states to have auto insurance if you own a car, so that’s a given; it’s also important for covering young drivers at home. Similarly, most lenders won’t finance a mortgage without homeowners insurance. In both cases, you’re protecting yourself financially with coverage of loans, damages, injuries, and losses. But other kinds of insurance aren’t as straightforward.

The following is a breakdown of insurance coverage recommended for you and your family members at each life stage:

1. Young adult (also applies to 20s and early 30s, before getting married and having a family):

• Health insurance: Even when you’re single, or young and healthy, health insurance is essential for covering medical expenses and providing financial protection. In the U.S., more than half of adults (56%) have some medical debt and nearly a quarter (23%) owe more than $10,000.¹ In fact, medical bills are the number one reason that U.S. individuals file for bankruptcy.² Enroll in a health insurance plan through your employer if it’s available, or purchase a private or government-sponsored plan.
• Disability insurance: Consider buying disability insurance to protect your income in case you become unable to work due to illness or injury. While only around 8% of Americans ages 18-34 report having a disability,³ if you do become unable to work and don’t have disability insurance to cover your expenses, it can have a long and debilitating impact on your financial security, freedom, and flexibility. There are several types and definitions of disability that affect the income protection you deserve. Many employers offer short and long-term disability insurance; however, these only protect your income while employed by that company. Supplementing employer coverage with an individual policy will provide optimal income protection.
• Renters insurance: If you’re renting a house or apartment, purchasing renters insurance covers your personal belongings and provides liability coverage. It isn’t a law to have renters insurance, but most landlords require it to protect them from liabilities such as damage or personal injury on the property. However, their required insurance may not cover your personal property; it may be beneficial to also have your own policy. It’s important to be aware of the coverages and limitations in the landlord’s master policy for the rental unit.
• Life insurance: There’s no better time for looking into getting life insurance. Your age and health play a large roll in obtaining life insurance for the least amount of cost. Preparing for your financial future when entering the workforce, or before starting a family, is a great way to begin building the foundation of decades of wealth accumulation and management.

2. Starting a family (also applies to 30s and 40s, single or married):

• Health insurance: As you age and add family members to your household, health insurance becomes more essential. If you don’t have employer-sponsored insurance, consider a private or government-sponsored policy for the family. Also, take advantage of a flexible spending account (FSAs), Section 125 (cafeteria) plan, or health savings account (HSA), if available through your employer.
• Disability insurance: If you don’t already have disability insurance, this is the time to consider getting it. As we age our risk of disability increases. It’s also likely that your income is higher at this life stage, and you may have dependents for which you are financially responsible. Consider whether you need to increase the coverage limit or pay for supplemental disability insurance. Disability insurance typically covers around 60% of your income.
• Homeowners or renters insurance: If you are renting, you should have renters insurance, as noted in the previous section. And, if you own a home and have homeowners insurance, you might consider an umbrella policy which can provide additional liability coverage above auto or homeowners insurance limits. It can also cover you and household members from some lawsuits.
• Life insurance: Like disability insurance, your employer may offer a group policy. Often, these policies cover your salary or more while you are employed with the company. You may also be eligible for supplemental life insurance from your employer. Otherwise, look at purchasing term or permanent life insurance on your own. Calculate the true economic cost of your family losing you, beyond your income, to determine the appropriate coverage. You might also consider a child rider that covers funeral expenses; it can be converted to a permanent life insurance policy for the child — it’s more affordable at a young age and could help them with eligibility when they’re older.
• Pet insurance: If you’ve ever owned a pet, you know that medical expenses can be in the thousands of dollars over their lifetime, especially if they develop chronic issues or live well into senior age. And if it seems like veterinary care is getting much more expensive, you’re right, it is. Care from veterinarians in private clinics or hospitals increased by nearly 8% from 2023 to 2024, and by nearly 60% in the past decade.⁴ If you’re growing your family with pets during this life stage, you might consider pet insurance, particularly when the pets are young.

3. Middle-aged (also applies to 40s and 50s, pre-retirement):

• Health insurance: Review your plan and adjust dependents, as needed. Your dependents can stay on your policy until age 26, but if they’re working full time they can utilize their own employer-sponsored plan and possible lower your premium. If you are considering retiring before age 65, when you can apply for Medicare, explore your options with COBRA, government-sponsored plans, private insurance, or a spouse’s employer-sponsored plan.
• Disability insurance: Consider keeping your disability insurance until you retire, if you don’t have savings and investment accounts to cover your household and family expenses without any income. Take note that the average long-term disability insurance claim lasts for 34.6 months.⁵
• Homeowners or renters insurance: By this life stage, you may have accumulated personal property that is valuable, such as a second home, or is sentimental, such as a memento from a parent or grandparent who passed away. If you haven’t already, check out getting coverage for the items through your homeowners insurance carrier. Consider helping your child in college, who lives in an on-campus or off-campus rental, get a personal renters insurance policy. The housing landlord may require that you pay for their insurance, but it might not cover personal property, such as your student’s laptop and other costly items.
• Long-term care insurance: In addition to reviewing and potentially updating the insurance you needed in your 30s and 40s, at this life stage you should consider long-term care (LTC) insurance if you have concerns about being able to pay in the future for caregiving services in your own home, including nursing homes and assisted living. Premiums increase with age so obtaining LTC in this age period is ideal, especially if you have health issues or a family history of problems that required long-term care. Consider updating or getting life insurance with an LTC rider.

4. Retired (also applies to 60s and beyond):

• Health insurance: Enroll in Medicare for health coverage during retirement. Consider Medigap policies to supplement Medicare coverage.
• Life insurance: Life insurance can provide financial security for your surviving spouse and leave a legacy for your heirs. On the other hand, if your family financial responsibilities have changed, or you have other means for leaving a legacy, review your policy to determine whether the specific amount is still needed. Before getting rid of life insurance, talk with your wealth advisor about the benefits of charitable donations and how life insurance can help offset estate taxes.
• Long-term care insurance: Coverage becomes increasingly important as you age and possible caregiving costs approach. Explore your desired caregiving situation and its costs in case the need arises, such as home care or assisted living, and adjust your LTC coverage limit if needed. The U.S. average cost of assisted living is $5,665 per month in 2024,⁶ but could be higher depending on the location.

Individual circumstances vary — insurance isn’t one-size-fits-all. Since each life stage has different insurance needs, it’s essential to review your insurance needs regularly and adjust your coverage accordingly.

Consult with your wealth advisor to ensure you have the appropriate coverage for your situation.

If you are not a client of Mercer Advisors, and want unbiased insurance advice to be part of your wealth management, let’s talk.

1.“Can medical bankruptcy help with medical bills?,” USA Today, Nov. 13, 2023.

2.“Medical Bankruptcy and the Economy,” The Balance, Jan. 20, 2022.

3.“8 facts about Americans with disabilities,” Pew Research, July 24, 2023.

4.“A big pet peeve: Soaring costs of vet care bite into owners’ budgets,” USA Today, April 17, 2024.

5. Disabilitycanhappen.org, The Council for Disability Awareness.

6. “How Much Does Assisted Living Cost?”, TheSeniorList, May 1, 2024.