Life Insurance, Major Life Changes & Beneficiaries


WHILE life insurance can seem like a once in a lifetime decision, there are a number of life events that should cause you to take another look at your life insurance policy to see if it is still right for you and your family. So what should your life-insurance policy do for you and your loved ones, and what life events should make you reevaluate whether your is life-insurance policy still right for you?

Do you need life insurance now?

Deciding whether you need life insurance depends largely on your age and your personal situation. If you have children or a spouse, having life insurance, no matter what your age, is important to ensure that they are cared for should anything happen to you. If, however, you are not married or do not have children, do you still need life insurance? One thing to consider is whether you have any family or other people who rely on you financially, such as your parents.

Another consideration is your age. It is considerably cheaper to purchase life insurance at a younger age, so if you plan on having a family in the future it may be wise to give yourself the best protection at the lowest rate.

Retirement and life insurance

Retirement is a time when you experience a number of changes in both your day-to-day lives and financial and family lives. This is also an important time to reevaluate your life-insurance policy, and in most cases make some changes in the type of coverage you have. At retirement, you and your spouse’s financial situation is likely very different than when you first got married. Your family has also changed, and your children are likely not in need of the same financial security through you that they once did. This is a time when choosing a more affordable life insurance that can offer you a cash value may in your
best interest.

Other reasons for buying life-insurance could be by understanding the different people who may depend on your income, or who happen to have an insurable interest.

Choosing the beneficiaries for your life insurance policy is one of the most important decisions you will make. Life insurance is, after all, meant to protect your family and loved ones. While your immediate family may seem to be the obvious choice as your life-insurance beneficiary, there may be other people and organizations which rely on you that you would want to remember.

Here are some of the most common and commonly forgotten life-insurance beneficiaries you need to consider, and tips on how to decide how much you should allocate to each.

Children and spouse—For most of us, these are the beneficiaries to whom most of our funds will go. It is important to choose a policy that will not only cover their daily expenses, such as any outstanding debts and mortgage payments, but also future expenses such as tuition fees for your children and a retirement fund for your spouse.

Parents—If your parents rely on you for help with expenses, such as medical fees, prescriptions, or other living expenses, it is important that you leave a portion of the coverage to them. This will give you—and them—the peace of mind of knowing they will be covered.

Other family and friends—Whether it be siblings, nieces or nephews, or other close friends who rely on you for various expenses, ensuring that they are covered is important.

Business partners or employees—If you own a business or are involved in any business ventures with other individuals, making sure that their interests are protected is important. It is also important that you have the necessary protections in place for any employees you may have to ensure they are not put in a difficult financial situation.

Charities and organizations—If you offer financial support to any charities, organizations, or groups that rely on your support, making sure that it continues after you are gone is an important part of taking care of your responsibility in estate planning. An easy plan is to allocate an amount similar to that you currently provide over
several years.

An insurance agent can help you find the policy that works best for you at any point in your life through proper financial needs analysis.


Ryan de Vera is a registered financial planner and chartered trust and estate planner. He is the chief enrichment officer of Wealth Builder Asia, a wealth management group.   To learn more about personal financial planning, attend the 71st RFP program this September 2018.

To inquire, e-mail or text <name><e-mail> <RFP> at 0917-9689774.


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