Does Your Life Insurance Really Suit Your Situation?

Most people think of life insurance as a one-size-fits-all product. You assume you need a certain amount of coverage, you purchase a policy with a premium you can afford, and now you’re all set… But are you?

The truth is, each life insurance policy is not designed to appeal to everyone, nor to cover every need. The process for choosing a policy that adequately protects your loved ones should be based upon much more than a final number (the death payout). Unless your situation is excessively “typical” – and let’s face it, whose situation is typical these days – then you probably need a more personal approach to selecting a life insurance policy.

Let’s take a look at some situations that require deeper consideration.

You have minor children, an adult child who is disabled, or you’re at least partially responsible for the care of grandchildren. Life insurance is considered a way to replace your lost income, in the event that something happens to you. But what about childcare, in the event that your spouse needs help or needs to go back to work? What about the care of an adult child with a disability? Are you partially responsible for any grandchildren?

In addition to basic childcare issues, have you considered the cost of a college education? Had you planned to pay for a wedding one day, or to help your children purchase their first home?

Debts. Most of us hope to cover burial expenses and the mortgage, by purchasing a life insurance policy that at least meets those expenses. But keep in mind that if your life comes to an unexpected end, your spouse (or the estate) can be responsible for all medical bills left behind. It’s impossible to predict what might happen to any of us, at the end of our lifetimes, but often a premature death is preceded by extensive medical care (and bills).

Covering lost retirement income. Pensions are less common these days, but do still exist. Does your pension plan continue to make payments to a surviving spouse?

What about Social Security? Widows and Widowers can’t claim those spousal benefits from Social Security until age 60. If your spouse is younger than 60, how will he or she cover your lost Social Security income in the meantime?

Healthcare. This is a big one. If your spouse or children depend upon you for a health insurance policy, will that policy continue even if something happens to you? In many cases, it will not. Your spouse won’t be eligible for Medicare until age 65, and of course minor children must be considered. Even if your spouse is eligible for Medicare, what about the premiums, co-pays, deductibles, and other uncovered expenses? What about their own need for long-term care someday?

Various forms of insurance, including life insurance, can be used to cover these needs (and others unique to your situation). But as with all types of insurance, you must carefully anticipate the need and plan for it ahead of time. Schedule an appointment with us to discuss your family’s unique structure and needs, so that we can help you evaluate your coverage and make recommendations for additional protection.