subject: Have You Reviewed Your Insurance Coverage During Key Life Events? [print this page] Have You Reviewed Your Insurance Coverage During Key Life Events?
Buying life or living benefits insurance isn't something people are generally thinking about. Even though buying the right kind of insurance can be as important a financial decision as buying a home, it can be an uncomfortable subject to review. Let's face it; it can be uncomfortable to talk about death, illness, injury, and other unpleasant topics.
There are certain times in life when insurance planning is top of mind, especially when your financial situation has drastically changed. This article will identify many of these life stages and give a brief outline of the insurance review you should consider adding to your priority list.
Marriage: this is often the first major financial change people experience. With financial obligations now to someone other than yourself, you should be looking into buying life insurance to protect your spouse.
Buying your first home/ upgrading your home: with the added financial obligation of home ownership and paying down a mortgage, you again need to review your life insurance. Another beneficial policy would be critical illness insurancedesigned to cover two to three years of mortgage payments if you were ever diagnosed with cancer, heart disease, stroke, or a number of other life changing illnesses or injuries.
The birth of a child: if it is your first child or your tenth, you need to review your life insurance needs. With each new child, there is added financial responsibility. Topping up your life insurance would be prudent.
Divorce: becoming single again will also dramatically change your financial picture. Be sure to have life insurance on any child or spousal support payments being made. Consider critical illness insurance and/or long-term care insurance. Both of these policies provide tax free income for serious health concerns or the need for care. Ensure your financial well being is considered when you are on your own again.
Career change or self employment: this stage may result in a major change in your income, work arrangements, benefit package, etc. You will need to review your total insurance package. If self employed you likely have no coverage and will need to get additional life insurance, disability coverage and maybe a drug and dental plan. Changing jobs means you may have better, worse or no benefits compared to your previous position. A review of your new benefits package would be important.
Becoming an empty nester: when the children leave and become financially independent you may enter a stage of financial freedom and serious savings. This is a perfect time to review your insurance plan, transitioning from risk protection to legacy and estate planning. Your 50's and early 60's is the perfect time to review term life insurancepolicies and see if they can be converted into permanent life insurance.
Approaching retirement: when total or partial retirement is only just around the corner, many financial planning considerations need to be addressed. Ensuring the different sources of retirement income are going to meet your financial needs is crucial. Also, a care plan needs to be established, covering the details of who will provide elder care in your later years, and how you are going to fund it. A long-term care insurance policycould address these planning needs for your later years.
All significant life stages are points at which people should be reviewing their insurance portfolio. At Life Guard Insurance we will gladly take you through a financial needs-based evaluation to determine your personal risk exposure, and make recommendations on the best way to patch any holes in your financial plans.
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