Big life events and life insurance
[social_share]Life insurance is the safest and most secure way to protect dependents. However one issue is that dependents are not adequately covered. This means that life insurance should be constantly reviewed, sometimes on a regular basis but also linked to big lifestyle events.
One of the methods that should be used is to have an annual review of life insurance coverage. These should be put in the calendar and should look at the payout that can be expected and the expenses that these would need to cover and decide whether the cover is adequate.
However there are other times when these reviews should be put in place; and these are when there are big life changing events that will in themselves mean that there is going to be large pressure on people to pay their bills. These can marriage, the birth of children as well as bereavement.
Marriage is always a good time to take stock of the new financial situation. It is here that two person decide to link together their financial future. Most people will spend more time discussing the cars that will take them to the wedding than the financial changes that need to be made. However there will be more dependence than both parties are used to and this should be reflected through life insurance.
The birth of a child is another point when people should take stock of their situation. This will mean that they should look to make some provision not just for the child, but also for the partner who may be cutting down on their work hours. There is also the issue of child care if the partner who deals with the child care should die.
Buying a house for the first time is another life event for considering life insurance and whether there is enough. Buying a house will involve taking on a large debt that if it can not be paid will mean that the house will be repossessed. It may be an option to simply move to a smaller house, but this should be discussed and decided before, rather than after, a death happens.
When children get their first full time jobs may be another point to consider life insurance. At this point the dependence on the parents reduces, and it may be an idea to reduce the life insurance. This is also the case when a mortgage gets paid off.
