When You Should Review Your Life Insurance Options

September brings fall weather but it’s also Life Insurance Awareness Month. Talking about life insurance can be hard and so can knowing when you should review your coverage options. Read on to see when you should be reviewing your life insurance options to stay protected. Need help getting new or additional coverage? Send us a quick message here!

Marriage

It may seem that only the primary breadwinner should get life insurance coverage, but this mistake could be costly. Just because you don’t have a high income, or don’t work at all, you should consider life insurance. Your investment can help pay for death expenses, provide for your children and their care, help your partner pay off debt, etc. It is important to protect each other with the right life insurance coverage.

Divorce

On the other hand, if you and your spouse part ways, you may need to keep, adjust, or purchase new life insurance. Also, make sure to update your beneficiary if necessary. You may feel the need to provide insurance to help children, other family members, or friends who would survive you.

Birth/Adoption

Congrats on the new addition! When you add a new dependent make sure to check in on your life insurance policy. Protecting your family in the event you pass away is even more important when you have children who will have expected costs like school/college tuition and possibly unexpected costs like medical treatment. Make sure that whoever would end up caring for your kids has the best possible financial backup.

Death

We already don’t like talking about life insurance since we’re talking about what could happen if you passed away. But what happens when someone else in your family passes away? You may need to adjust your coverage depending on how someone else’s death could affect you and/or your family.

For example, if Jenny’s spouse passes away, she suddenly becomes responsible for their whole family. Even if Jenny is in her 50’s she probably will still need more life insurance. She may want to make sure she has coverage to help all of her kids get through college or provide a nest egg that could help them buy homes. If Jenny’s children are already getting their own life insurance, she may be able to lower her coverage or change her beneficiaries to support her grandchildren or a family trust.

life insurance - financial impact in one month stat

Change in Your Finances

Whether you find yourself making more or less money, you should evaluate your life insurance options. You may be able to elect term coverage to lower premiums if you lose your employer-sponsored coverage, or you could add whole life insurance to supplement existing coverage.

Retirement

If your retirement plans outside of life insurance generate enough passive income for you (and your family) you need less coverage. However, if your spouse would not have enough income to support themselves if you were to pass away after retiring, you may need more coverage.

Your life insurance can also be used outside of family members. You can have it benefit a trust, your alma mater, or your favorite charity. If your family has adequate income and coverage, you could consider changing your beneficiary to have an impact in your community instead of stopping coverage altogether.

Tax-law Changes

Most people don’t need to worry about estate taxes, but that can always change. If you end up with a taxable estate, life insurance can help mitigate those expenses for family or other beneficiaries who would survive you.

Individual Life Insurance policies: Every Two Years

Many of the prior events are unpredictable, so if you have an individual policy and you don’t experience any life events, it is important to review your policy at least every two years. You’ll know you’re covered correctly and have an idea of what your options should be if you experience any special life events.

Employer-sponsored Life Insurance policies: Every Open Enrollment

If you have life insurance options from your employer, make sure to review your policy and options every year at Open Enrollment. This is your only opportunity to make changes unless you have a qualified life event.

You’ll want to look over your coverage level and costs, but also make sure your beneficiary information is accurate and up-to-date.

Still wondering if you really need life insurance? Check out our article Fact or Fiction, Who Really Needs Life Insurance? 

Employers, are you looking for more information about offering life insurance coverage options to your employees? Click Here to learn more about adding life insurance to your employee benefits package.

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Life Happens

Cathy Siska COO

Cathy Siska
Chief Operating Officer

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2018-09-17T15:05:34+00:00 Employee Benefits|