There are many events that can change the course of your life. A new baby, marriage, divorce, or even a death in the family could lead to big changes for you and your finances.
The most important financial decision you can make is related to insurance coverage during these life-changing events. In this blog post, we will help you determine what kind of insurance coverage is right for you so that when it comes time to make those decisions, they won’t seem as overwhelming!
Table of Contents
Life insurance needs for a new baby
Life insurance needs for a new baby can be complex. The type of life insurance you need depends on your personal circumstances, including:
- Who will care for the child if both parents pass away?
- How much money is saved for your childrens’ education?
- What happens if one parent dies before the other?
- Do you want to provide funds for the care of elderly parents or grandparents?
- Are there any outstanding debts that need to be paid off first?
- Who will pay for a funeral and burial expenses if both parents die before their baby turns 18 years old?; etc.
There is no one size fits all insurance solution. With all of these factors in mind, many people choose to purchase a policy that will pay off any outstanding debts and provide funds for the care of their children or elderly parents.
In most cases, a joint life insurance policy purchased by both spouses would be sufficient to take care of these needs as well.
Life insurance needs after a divorce
In the event of a divorce, your life insurance needs change drastically. You may not need as much coverage for children or elderly parents if you’re no longer living in a household with them. Depending on how much equity is being split up between you and your former spouse, he/she may want to purchase an “inheritance” insurance plan to make sure that you never have a claim on their assets in the event of an unforeseen circumstance, such as death.
You may also need coverage for your former spouse should they be unable to work due to illness or injury. This could include disability insurance and income protection insurance.
In most cases, it’s wise to seek legal advice to make sure that you’re leaving all your bases covered.
Some insurance providers offer divorce-related coverage, so it’s worth doing some research into what options are available for the best fit in your situation.
Life insurance needs for retirement
If you are planning to retire in the next few years, it’s important to get life insurance because there is no guarantee that your retirement plan will be sufficient. You might not have enough money saved up and if you don’t buy life insurance before retiring, then you may need a significant part of your savings to cover the cost of your life insurance.
If you’re retired and already have enough money saved up, it’s important to speak with an advisor about how much coverage is needed for retirement needs. A lot will depend on whether or not there are any other sources of income available during retirement such as Social Security benefits. You might also need to get life insurance if you’re planning to take a lot of retirement trips.
The type of life insurance you need depends on the events that will require its use. Knowing what events your policy covers can help you choose one with a higher payout. If this sounds complicated and overwhelming to figure out by yourself, reach out to an advisor like Dundas Life, who can walk you through all the options available and find one perfect for your needs.