Each stage of life presents its own set of needs and challenges and, as a result, members of each generation generally have similar insurance needs as their peers. In this three-part series, we’ll explore the unique insurance needs of the three oldest generations: Baby Boomers, Gen Xers, and Millennials. In Part 1, we’ll focus on Baby Boomers.
Who Are the Baby Boomers?
Baby Boomers, those born between 1946 and 1964, are now 54 to 72 years old. Many are in the pre-retiree phase, while others have already or are about to retire. They may be empty-nesters or they may have adult children at home or in college. Many have paid off their mortgages, although others may still be paying or have sold their larger family home in favor of a less expensive housing situation. They have the least amount of time left to save for retirement but also may have the least amount of expenses to consider if they find their unable to work.
Having adequate liability insurance to protect assets is an essential coverage for Baby Boomers. Liability insurance is often a component of homeowners and renters insurance, but the limits included in these policies may not include high enough limits. For this reason, consider an umbrella policy. While this is an important consideration for all ages, it’s especially important for Boomers who do not have as many years left in the workforce to recoup assets lost due to a legal settlement. One car accident or injury could result in a lawsuit that wipes out everything, or it can be covered by liability insurance to preserve one’s future.
Property insurance is essential for property owners of every age, but Baby Boomers have a few more scenarios to consider. Many at this age are choosing to downsize their homes, or perhaps sell secondary homes in order to purchase one for retirement, and their homeowners insurance will need to change accordingly. For those who are putting items into storage, acquiring new pieces inherited from a parent, or simply moving from one home to another, ensuring that items are covered in all locations or in transit should be a priority. The property of adult children must also be considered, whether they are living at home or in a college dorm. Children who are out on their own should purchase their own homeowners or renters insurance as they may no longer be eligible for coverage on the family plan.
Long Term Care Insurance
Long term care insurance, or LTC, helps to pay for expenses associated with nursing homes, assisted living facilities, adult daycare, and possibly in-home services. When one can no longer perform the activities of daily living such as basic hygiene, feeding, or transferring from seated to standing position or in and out of bed, custodial care may be required. This type of care is very expensive and can deplete a person’s savings very quickly. In order to qualify for Medicaid, one would have to spend down nearly all of their assets. As a way to protect everything one has worked hard for, obtaining LTC insurance is a must.
Life insurance is designed to provide for family, even after death. It can replace future lost income, pay for college for the deceased’s children, or help pay for the family home. Once someone is past the point where these future financial situations are a concern, this does not remove the need for life insurance. Life insurance can also be used as an estate planning tool to pay for estate taxes, funeral costs, and outstanding debts. Baby Boomers may find they don’t need the same level of insurance they did when they and their families were younger, but they generally still have a need for some level of coverage.
A newer product on the market is a policy that is essentially life insurance, but contains a long term care component. Some may find they don’t wish to purchase LTC for fear they may not use it. With a hybrid policy, if you end up never needing the long term care portion, the life benefit will be paid to your beneficiaries, making this a very valuable coverage. An insurance advisor can help determine if this option make sense given the insured’s health, assets, and existing insurance coverage.
Don’t Forget the Fun Stuff
Baby Boomers are often at a point where they can begin to ramp up their pursuit of their own hobbies and interests. Many of these personal pursuits will require specific insurance policies. Travel, valuable collections, and boats, for example, can all be covered by insurance policies that will protect the fun things life has to offer after a lifetime of work and raising a family. For those who wish to serve on a board of directors of a nonprofit, directors and officers insurance (D&O) can serve a similar purpose as the personal liability but for work associated with the organization.
Regardless of generation or circumstance, most individuals and families can benefit from a discussion with an insurance professional to assess what kind of coverage is necessary to best preserve their assets and lifestyle. The advisors at New Agency Partners can help evaluate the insurance coverage you have, identify gaps that leave you at risk, and recommend the best coverage for your situation.
All insurance policies are different. Be sure to review your insurance policy for specific information about coverages available to you. Nothing in this post is meant to suggest a guarantee of coverage.