By Steve Zeller

When was the last time you stopped and took a good look at the changes in your life in the past few years? You now may have children and more assets than you did years ago.

While your lifestyle may have changed a lot, your life insurance policy may not have. To determine what your current life insurance needs are, look at the four stages of life insurance. When thinking about buying a life insurance policy or reviewing a current one, identify which stage you fall into. This may help streamline your choices.

Stage 1 - Protection. If you are between the ages of 25 and 40, it is likely that your greatest insurance concern is protection, especially if others depend on your ability to provide income. Establishing a solid foundation of life insurance coverage that protects your loved ones should be your first step. If you die prematurely, your insurance can make certain that your family receives the money necessary to provide an adequate income and handle other expenses, such as child care and mortgage payments. This would hold true for both single-income and two-income households.

Stage 2 - Maintenance. You should re-evaluate your life insurance policy between the ages of 40 and 55 and adjust your coverage to meet your current needs. Most likely, you’re earning more at this stage in your life than when you last purchased insurance. Thus, more of your income would be needed to meet your family’s future expenses in the event of your death. These expenses may include a child’s (or children’s) college education as well as those funds set aside for your retirement nest egg.

Stage 3 - Accumulation. During this stage, usually between the ages of 55 and 65, your primary concern usually is whether you and/or your spouse will have enough money to retire comfortably. Also, you may still want death protection for your family, even though your children may be past their college years and living on their own. You also might want to set aside some money for your grandchildren’s education or other future needs. However, your primary goal will most likely be a comfortable retirement.

Stage 4 - Conservation. Once you’ve reached your retirement years and you’ve determined you have enough retirement income, your focus may shift to your estate. If your estate was worth more than $675,000 in 2000 and you have done no planning, your heirs will owe taxes on it at your or your spouse’s death, whichever comes later. Your life insurance can provide your heirs the necessary cash to pay sizable estate taxes and help preserve assets that otherwise would have to be sold.

Based on what stage you are in and what your financial goals are, you will be able to determine which type of life insurance suits you and your needs. Although, life insurance may not seem like an important part of your financial picture right now, don’t forget, there are others in the picture with you who just might benefit from your careful planning.

Steve Zeller is a financial consultant with A.G. Edwards & Sons Inc., member SIPC, 379 Lytton Ave., Palo Alto 94301. For information, call 326-5010.