When the nest is no longer empty
Many planners and advisers coach their clients to prepare for “Empty Nest Syndrome.” This is the time of life when the kids are out of the house and on their own. The parents no longer have to support them. This can be liberating, but also sad in a way. The family home that was once filled with all the ups and downs and in-betweens of family life, now has just those memories.
But times do change. Family financial planning should consider that the nest may not remain empty. This is especially true with regard to life insurance planning.
First of all, many children these days take a longer time becoming financially self-sufficient than did their parents. Many factors probably contribute to this: mindset; economic conditions; societal trends such as divorce. Whatever the reason, it may not be true that the kids will be out of the house for good in twenty years or so.
Another consideration is that the parents themselves may not remain financially self-sufficient. The kids might be out on their own, but the parents could be struggling. Declining health; poor job conditions; and reduced government or pension benefits could result in the parents becoming dependent on their childern.
Both these possibilities should be addressed when a family plans its finances. From a life insurance point of view, it could mean that the conventional idea of buying 20-year term may not work. The parents may need longer coverage in case the kids come back home to the nest. The kids may need longer coverage in case the parents come home.