Life Stages That Impact Your Life Insurance Needs
Just like everything in life, as changes occur – and they do – we must adapt and make adjustments to stay on top of the game. Change is what keeps us vibrant and on a path of success.
Your financial planning needs are vastly different as a 22-year-old single person just beginning a career than they will be as a 30-year-old with a young family and moving up the corporate ladder – let alone as a 45-year-old in upper management or with your own business and kids in college.
The same goes for your life insurance coverage. What worked for you a decade ago is likely to be inadequate for your needs and commitments today. While no one really enjoys discussing the reasons for life insurance – the reasons to do so are real. Your spouse or partner. Your kids. Your business.
At Hamilton Financial Planning we address all aspects of your financial future – including life insurance. We know you understand having life insurance is part of a responsible financial plan, but it is easy to forget changes are needed. So part of our regular review includes reevaluating your life insurance needs and coverage on a regular basis.
Table of Contents
5 Events that Impact Life Insurance Needs
1. Marriage
Getting married is a positive and exciting life event for any couple, but amidst all the party planning most couples fail to think about how marriage affects their life insurance needs. Getting married means that you are now working as one unit and your financial obligation now becomes a joint effort. While marriage doesn’t directly affect life insurance rates, you can opt to purchase a policy together. Having a joint policy means that if one of you passes on, the surviving spouse is financially stable and can maintain their current living standard. The surviving spouse is also in a position to use the death benefits to supplement retirement or a child’s education down the road.
2. Becoming a Parent
Becoming a parent is equally an amazing and terrifying experience. One moment you are an independent adult and the next you have a child who is entirely dependent on you. It is vital you and your spouse review your life insurance policy because it is not just the two of you … you now have a little person fully dependent on you financially. It is time to seriously consider how your family would cope financially if something happened to either you or your spouse.
When you have a kid, there are other important factors to consider – starting with kids can be expensive to raise. And child-rearing expenses tend to rise with age. Education is the first thing that comes to mind. Orthodontics is another. As a parent, you have to ask yourself if your partner can handle child-related expenses if you are suddenly not there.
I have two sons; believe me – I get it.
3. Mortgage Protection
Your family home is probably your most significant asset but it is also is one of your most substantial financial responsibilities. For most families, mortgage repayments constitute their largest regular expense, and it is for this reason most people take out life insurance policies. Life insurance can be an essential lifeline for the family especially when the primary earner in the family passes away.
4. Running a Business
If you are self-employed and you run your own business, chances are you’ve made a substantial investment in it. If you have made an investment in the recent past such as purchasing a new building, it could change the value of your business. If this happens, you should increase the value of your life insurance to cover new business costs/debts to protect your family’s liability.
The hard reality is if you didn’t have life insurance your family can be faced with the need to liquidate the assets you worked so hard to acquire.
5. Divorce
If you and your spouse decide to divorce, it is crucial you determine what happens to your life insurance policy. A divorce raises two types of issues – those of the beneficiary and those of coverage. If your marriage is childless the issue is as simple as changing the beneficiary and adjusting your coverage so it reflects your newly single status. If you have children, you should change the beneficiary from your spouse to the children.
Again, at Hamilton Financial Planning we do understand that life insurance planning can feel depressing – but it really is a basic way to care for loved ones and protect your assets.
Have Questions About Your Life Insurance Coverage?
Schedule Your Complimentary Get Acquainted Meeting Today!
Get The Insurance Coverage You Need
If you are still unsure as to whether or not you need an umbrella policy, our team at Hamilton Financial Planning can help! Schedule a complimentary get-acquainted meeting online or reach out to us at 512-261-0808 or scott@hamiltonfinancialplanning.com.
About Scott
Scott Hamilton is the founder and chief financial officer at Hamilton Financial Planning, a wealth management firm that specializes in providing comprehensive financial planning for retirees in Dallas, Houston, and Austin, Texas. With over 20 years of experience in the financial industry, and has completed over 250 financial plans for retirees across all industries, but mostly the oil and gas industry, Scott is passionate about providing his clients with the tools and insight they need to achieve their financial goals.
He has a Bachelor of Business Administration in finance from Texas State University and an MBA in international finance from Pepperdine University. Scott has also been happily married to his wife, Gayle, for over 25 years. To learn more about Scott, connect with him on LinkedIn.
