Time to Review Your Life Insurance?

Many people buy life insurance when they are young, perhaps when getting that first good job, but then never review it again. This is a mistake! Although there can be many reasons that your need for life insurance may change, there are some key events in life that can indicate the need for more or less life insurance coverage.

An article in US News and World Report last month highlighted several of these notable events:

  • Marriage: Some couples wait until they either have children or purchase a home to think about life insurance but this overlooks some key liabilities. Marriage creates a union in finances and each person is now exposed to the total liabilities as well as the assets of the couple. Usually, two incomes are being used to finance a certain lifestyle and consideration must be given as to what would happen if one of those incomes suddenly disappeared.
  • Children: The birth or adoption of children immediately creates financial commitments. These can range from making sure that a surviving spouse can raise the children with just one income to providing for higher education down the road.
  • Home Purchase: Most people get this one because it is such a large financial commitment and you want to be sure that a surviving spouse has enough money to continue ownership of the home. What is sometimes missed, however, is when the second or third home is purchased. Often the new home is more valuable than the last and the mortgage is even higher. It is important to review life insurance at each new purchase or refinance to make sure there is still enough coverage.
  • Starting a Business: When a person starts a business they often max out their resources and credit in order to get the fledgling enterprise off the ground. That simply means that if the person were to suddenly die, a surviving spouse or perhaps business partner would be left unable to move ahead without a significant amount of cash. In addition to coverage for a spouse, there are specialized policies for business partners to protect each other from disaster.
  • Over 50(ish) and Retirement: As they age, people often find themselves as “empty nesters” when the house is paid for, the kids are gone and college is no longer a worry. This is a time when life insurance can be reviewed and either decreased or possibly shifted to another type of coverage. Usually, the need for extremely large amounts of coverage has passed. At this time a person might do away with large term policies and perhaps look at either Long Term Care policies or Final Expense policies.

With regard to life insurance, every person’s situation is unique. Just because a co-worker or relative carries a certain amount of coverage, that has absolutely no bearing on how much you should carry. Any change in your financial or personal life can signal a review of your life insurance, but the times mentioned above should be your minimum benchmark. If you want to review your insurance, you may find my ebook Do You Really Need Life Insurance can be of great help.

Introducing The Insurance Geek

The Insurance Geek is a blog and website designed to make some sense out of what is often a confusing subject for many people. Insurance is not an exciting purchase, certainly not like buying a new car. No matter how deeply you plunge into debt to get those new wheels, most everybody gets excited about pulling into the driveway with a shiny new car. An insurance policy, not so much. You really can’t wave your brand new health, life, home or auto insurance policy in the air and impress the neighbors. And, since the insurance is often required by the state or your bank, there is the additional burden of having been forced to do it.

During over 30 years as an insurance agent, I have found that, while people aren’t necessarily thrilled about the purchase of insurance, the biggest consternation arises from the fact that the coverage, options, features and premiums are seemingly designed to be as confusing as possible. I have spent far more time over the years just explaining insurance than I have actually “selling” it.

I have written a few ebooks on insurance topics with the express idea of providing consumers with the type of knowledge needed to be a smart shopper. Those ebooks are on this website under the Insurance Books page and can be purchased if you find an interest. There is another ebook coming soon about the incredibly frustrating subject of health insurance and another one on Medicare supplements and options.

To add to those ebooks, I will also be posting in The Insurance Geek blog where I plan to delve into the same sort of topics but in a more “bite-sized” blog approach and with greater frequency. I hope you will find the information helpful. My belief is that by taking just a little bit of time to become a more educated consumer, you will understand the subject a lot better and make the purchase of insurance a lot less aggravating and intimidating. And if I can do that for just a few people, it will have been a good day!

Happy Geeking!