Life can change quickly. When it does change, it’s helpful to review your financial strategy and make sure it still aligns with your needs and goals. Of course, life can also be hectic, so it’s easy to forget to review investment accounts, retirement plans and important financial documents.
If you own life insurance, it’s possible that you haven’t reviewed your coverage in years. Maybe you’ve never reviewed it. After all, life insurance operates in the background. It provides protection when you pass away, so you may not feel a need to review it. It’s a financial tool that you hope never gets put to use.
However, there are some changes in life that can have a sizable impact on your life insurance needs and protection. Below are a few such changes. If any of these sound familiar, it may be time to meet with your financial professional and review your coverage.
You have more children.
Having a child is a major life change in many ways, but it’s an especially sizable change to your financial strategy. Your child is completely dependent on you for food, shelter and a wide range of other needs. If you pass away unexpectedly, your child could be in a financially challenging situation. Life insurance helps mitigate that financial risk.
Similarly, your financial strategy could change when your child moves out of the home and becomes financially independent. If they’re no longer dependent on you for financial support, you may not need as much life insurance. Whether you’ve added a child or recently become an empty nester, take time to review your coverage and make sure it’s appropriate.
You get married or divorced.
Your spouse also may be dependent on you for financial support. If so, your death could be a financial disaster for them. Again, life insurance is a helpful tool to provide financial support to your spouse in the event of your death.
If you recently divorced, you may want to check and see if your life insurance is still necessary. Also, be sure to check your beneficiaries. If you don’t make a change, your ex-spouse could get a large life insurance benefit that should have gone to a child or other loved one.
You take out a loan to make a major purchase.
Did you recently buy a home, vacation property, boat or other big-ticket item? Did you take out a loan for that purchase? If so, that loan could become a big burden for your family if you pass away. They may not be able to sell the item for full value, and that could leave them saddled with the loan balance. Consider life insurance as an affordable protection tool to cover the loan balance in the event that you pass away.
You make a career change.
Very few people stay with one employer their entire career anymore. Anytime you change jobs, it’s wise to review your life insurance protection. You may have been dependent on robust group life coverage at your old job. If your new job doesn’t offer such protection, you may want to fill in the gaps with an individual policy. Also, if your income increased substantially with the job change, you may need more coverage to replace your income if you pass away.
You start a business.
Life insurance is a critical tool for business owners. That’s especially true if it’s a small operation that’s heavily dependent on the owner’s involvement. If you pass away, the business could fall apart. That could impact your family, employees and customers. If you have a business partner, they may not have the funds or liquidity to buy out your share and compensate your family.
Life insurance can address all these risks. It can provide much-needed liquidity to the business if you should pass away. It can also be used to fund a buy-sell agreement, where each partner has the money available to buy out the other’s shares and compensate each other’s families.
Ready to review your life insurance strategy? Contact us today at Jim Lee Financial. We can help you analyze your needs and adjust your plan. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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