We all face life changes: We get married; we buy homes; we have children; they go to college; we retire. Of course, these are happy occasions. But sometimes our life changes aren’t happy: We lose jobs; we lose loved ones; we get divorced.
When the unforeseeable occurs, there are many things to consider, and life insurance may not be top of mind – but it is, and should be, an important consideration.
For example, if you lose your job, your employer-provided life insurance policy may no longer be in effect, and you’ll want to consider alternatives. Fortunately, life insurance can be purchased without going through your employer – and rates can be very reasonable, depending on your age and health. (In fact, it’s a good idea to have a supplemental policy anyway, in case this happens.)
Take another example: negotiating a divorce settlement. You’ll need to specify who will own any life insurance policies you and your spouse have as a couple. If you have children you both may be required to maintain individual policies with the children as beneficiaries. A spouse who was dependent on the other spouse’s income may now need an independent life insurance policy.
Should you scale back?
Similarly, how long any life insurance policy should be maintained depends on the goal of the policy. If it’s meant to ensure that your children will be provided for when they reach a certain age, you might consider scaling back – but then it may be important that they be self-supporting and can also afford to pay for your end-of life expenses when needed.
These are only some of many life insurance issues that can arise as a result of life changes. It’s important, when life changes happen, to discuss your personal situation and your goals with your advisor who can help you make important life insurance decisions.