🎵 Do you still need life insurance? (a Gen X checklist)

This is our final week of publishing. After 44 issues over 15 weeks, we are wrapping up on Friday with a best-of summary and a proper signoff. More on that below. For today and Wednesday, we are delivering two more issues of practical Gen X finance. Thank you for reading.

If you bought term life insurance in your 20s or 30s, you did the right thing. You protected your family during the years when your income mattered most and your dependents needed a safety net. But now you are in your 40s or 50s, and the picture looks different. The kids are older. The mortgage is smaller. The retirement accounts have grown. So do you still need that policy? And if you have been told you need whole life insurance, is that actually true?

Life insurance serves one core purpose: replacing your income for people who depend on it if you die prematurely. Once that need shrinks, the insurance should shrink with it. But the insurance industry makes its money by convincing you that you always need more coverage, permanent coverage, coverage that "builds cash value." Most of the time, that is more about their commission than your financial plan.

1. Do you still have dependents who need your income? If yes, you need term life insurance. Period. The question is how much. A common rule of thumb is 10-12x your annual income, but the real answer depends on your specific obligations: remaining mortgage, kids' education costs, and how much your family would need to maintain their lifestyle.

2. Is your term policy still in force? Term policies last for a set period, typically 10, 20, or 30 years. Check when yours expires. If it is about to lapse and you still need coverage, renew or convert before the deadline. Rates jump significantly as you age, so do not let it lapse by accident.

3. Are you being sold whole life, universal life, or variable life? These permanent policies combine insurance with an investment component. The pitch sounds appealing: your money grows tax-deferred, you can borrow against it, and the policy never expires. The reality: fees are high, returns are low compared to standard index funds, and the policies are notoriously hard to understand. For the vast majority of people, buying term and investing the difference is the better play.

4. Have you considered your employer coverage? Group life insurance through work is a nice benefit, but it is usually not portable. If you leave or lose your job, you lose the coverage. Do not rely on employer life insurance as your only coverage if you have dependents.

5. What about final expense insurance? If your dependents are grown and self-sufficient, you may only need enough to cover funeral costs and any debts that would fall to your estate. Final expense policies are smaller (typically $10,000 to $25,000) and easier to qualify for. They serve a real purpose without overinsuring.

6. Have you reviewed your beneficiaries? Life changes. Divorces, deaths, births. If you have not checked your beneficiary designations in the last few years, do it now. Outdated beneficiaries are one of the most common, and most preventable, estate planning mistakes.

Life insurance is a tool, not an investment. Use it when you need it, drop it when you do not. If people depend on your income, get term coverage. If they do not anymore, redirect those premium dollars toward your retirement accounts. And if anyone tries to sell you a permanent policy with "guaranteed returns," ask them to show you the fees in writing.

Mixtape Millionaire is for informational purposes only and does not constitute financial advice. Always consult a qualified financial professional before making investment decisions.