September is Life Insurance Awareness month so I would be remiss if I didn’t take this annual opportunity to implore you to take stock of your personal situation. It is so easy for policies to sit in a drawer without ever being reviewed or to continue postponing the purchase of life insurance amidst the hustle and bustle of day to day life.
For the latter group, of which there are many, there is no time like the present. According to LIMRA, 30% of US households don’t have life insurance. Life insurance is based on, amongst other things, mortality. It would stand to reason that the younger you are the longer you have left on this earth. All things being equal, today is a better time to buy life insurance then tomorrow. The older you get, the more expensive it gets.
If you are the breadwinner and have dependents, child or adult, life insurance is not a luxury, it is a necessity. Young children and a non-working spouse make this particularly dire. While gloom and doom is no fun, I must impress upon you how devastating the financial ramifications would be for a single income household with young children to lose the breadwinner.
If you think you are taken care of through your employer’s policy, consider taking out a term-life policy so you are not tethered to that employer’s policy. When you change jobs, your life insurance doesn’t go with you so it is imperative you have your own policy if for nothing else but to supplement what is offered by your employer.
Switching gears to those with life insurance policies collecting dust, life insurance awareness month is a great reminder to review your policy. You may be asking what I mean by review the policy, since I am sure you have no intention of reading the legal jargon in your contract.
There are a few basic things you want to review. First, is your policy still in force? Some term-policies expire after five, ten or fifteen years and you may have neglected it so long it is no longer even in force.
Second, reassess your need for life insurance. Has your situation changed? Are your children no longer dependent on you and your income? Should you change your beneficiaries? Perhaps you want to keep the policy in force and add a charitable organization to your beneficiaries.
Finally, should you perhaps be re-underwritten for a new policy? Maybe you quit smoking or lost a significant amount of weight. Both of these factors could lead to more favorable policy terms and it may be worthwhile to replace your existing policy.
Life insurance is instrumental to the financial security of the household and the society as a whole. If you have young children, it is paramount. If your children now have their own young families, remind them to protect themselves. Take some time to consider your own situation before the ensuing holiday season.
This article is meant to be general in nature and is not intended, and should not be construed as personal financial advice. Investing involves risk and the potential to lose principal. Please consult your financial advisor prior to making financial decisions. Gary Parsons is a Financial Advisor with U-Vest Financial®, a separate entity from LPL Financial and can be reached at 850.300.7055. Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/ SIPC.