4 steps to get your life insurance on track


It happens to all of us. This is true whether you are on a quest to accomplish tasks at work or at home. I’d venture to say that we’ve all gotten to the end of a day and wondered, “What happened? I didn’t accomplish anything on my list.”

Unfortunately, this phenomenon can negatively affect your family’s finances, as well as your productivity at work or at home.

Life insurance is a great example. Discussions and plans regarding this touchy subject are easily sidestepped due to perceived complexity or a general uneasiness surrounding the topic. With that in mind, here’s an easy-to-follow, four-step process for your family to handle life insurance.

1. Determine the right amount of coverage

Begin with the end in mind. Literally. Finding out what you would need, given your unique situation, if something happened to you or your significant other is a key step in making family life insurance decisions. Yes, it will likely have major financial implications for your family if whether of you passed away. Things like paying off debts, covering final expenses, raising kids and then sending them to college, replacing lost income, and giving you or your spouse time to get back on your feet if something happens to them others may come at a considerable price. .

There are online calculators to help you figure out what you need. VA has one. There is an easy to use calculator at lifehappens.org. And, of course, an insurance agent can help you find the answer.

2. Analyze what you have.

Once you know what you need, it’s time to put it against what you have. First, for those in uniform, you likely have $400,000 of Service Members Group Life Insurance (SGLI), the military’s group life insurance. Spouses can have SGLI family coverage up to $100,000. Employers outside the military usually offer group coverage as well. In or out of the military, you can see how a job change can affect your life insurance coverage. This is one reason why it may make sense to diversify your sources of life insurance coverage.

And here things can get more complicated. You must select the type of coverage. What is the right type of insurance? In general, there are two broad types of coverage, short-term or permanent.

Temporary needs — those that go away, like mortgages and raising children — are well covered by term insurance. For example, if you have a couple of children, aged 3 and 5, you could buy a 20-year term policy (this type of policy has a level premium and death benefit throughout the 20-year period) that would provide cover up to the kids are out on their own — knock on wood.

On the other hand, for a policy that you intend to have “forever,” a perpetual policy may make sense. For example, there may be a sum of money that you want your spouse or family to have when you are gone, or life insurance that is part of complex estate plans or a special needs situation.

Now that you’ve decided what you need and taken a close look at what you have, it’s time to…

3. Fill in the blanks

If you’ve typed in the numbers and there are no gaps — neither in quantity nor in source — you’re done for now. On the other hand, if you need additional coverage, it’s time to shop.

A few things to keep in mind when doing this: First, large coverage needs do not necessarily mean large premium payments. Life insurance can be surprisingly cheap. Second, as I mentioned earlier, match the type of coverage you’re shopping for with the reason for the coverage. Finally, it is becoming easier and more convenient to buy life insurance. Digital applications, automated underwriting and technology and data are making it easier and faster to get life insurance. Don’t let the fear of the process put you off.

4. Rinse, wash and repeat

The ability to set and forget a strategy or process is nice. Unfortunately, life insurance doesn’t lend itself to that kind of approach. A new baby, new home, divorce, or a job change are all examples of common life events that can change your life insurance situation. Keep this in mind and, when these types of things happen, be sure to review your life insurance coverage with these simple steps.

Get coverage for your family’s needs

FSGLI, TSGLI, VGLI, SGLI … the long list of abbreviations and minimums may not be enough to cover your family’s needs. Explore life insurance options with our free tool, which compares rates and matches you with the coverage you want.

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