How to know when your insurance needs change
Some people don't like to discuss life insurance - but life insurance is an invaluable way to make sure your loved ones are protected should the need arise.
As we get older, however, our life insurance needs obviously change - particularly around lifecycle events. The challenge is knowing what those events are, and what do you do when those situations arrive.
If you are unfamiliar with life insurance, here's how it works: You pay a monthly premium, and if the unexpected happens, your loved ones get a death benefit they can use for things such as medical bills, funeral expenses, outstanding mortgage, college tuition and even living expenses. Different kinds of insurance include term life insurance, whole life insurance and permanent life insurance. Often times, you can mix with an assortment of insurance options.
According to LifeHappens.org, several life changes might prompt you to evaluate your insurance needs:
1. Getting married
Few things change your financial situation like marriage, when the financial obligations of the bride and groom become intertwined. If something should happen to half of the couple, how will the surviving spouse have the money to take care of credit card debt, home debt, or student or car loans? Life insurance can help meet those obligations.
2. Having a child
Once you start growing your family, it's best to start planning for the future. It's enough of a challenge to provide for your child or children with you and your spouse both working together. But what if one - or both of you - exits the picture? If you're not around, life insurance can help provide for your family even if you can't.
Life insurance can keep surviving spouses from receiving reduced Social Security benefits. If you begin collecting Social Security survivors' benefits at age 60, rather than at the full-benefit age of 66 or 67, you will receive a permanently reduced Social Security benefit. Having life insurance coverage in place may prevent your spouse from having to live on less.