Presented by Navy Mutual Aid Association
This year, about 39% of insured individuals said they wished they purchased their life insurance policies at a younger age, according to the Life Insurance Marketing and Research Association’s “insurance barometer” study.
For many policy owners, a major life event spurs their decision to purchase a policy. Some situations, in particular, may indicate that you should consider buying (or evaluating any existing) life insurance.
When you get married, you may share finances with your spouse. Whether you have a one- or two-income household, you’ll probably have shared living expenses. Purchasing two life insurance policies – one on each of your lives with the other listed as the beneficiary – ensures that you will be able to support each other financially even if something tragic happens.
Life insurance is especially important if you plan to make large purchases together, like a car or home. If one of you dies, the surviving spouse will still have to pay off the debt.
Material considerations in choosing your coverage amount include your salaries, the amount of debt you have acquired and your assets. Knowing you have enough coverage in place can provide peace of mind for years to come.
Welcoming a New Baby
Each time you add to your family, it means that someone else is relying on you for financial support. The average American couple spent between $12,350 and $13,900 annually on raising a child, according to data collected from 2011 to 2015 and released in a 2017 USDA report.
By the time a child reaches adulthood, raising them will have cost over $220,000 – not including the cost of higher education.
Purchasing a term life insurance policy to cover child-related costs as well as the cost of higher education can ensure that your child’s standard of living is maintained even if something were to happen to you while they were young. Once your child is a financially independent adult, you can reduce your coverage.
If you have a child with special needs who is a lifelong dependent, consider getting a permanent insurance policy. This type of policy will pay a death benefit upon your death no matter when it occurs, and you can designate the beneficiary of your policy to be a “special needs trust” with instructions on how to financially care for your child.
Military service is hazardous and deployments can be dangerous.
If you are headed to a combat zone, purchasing life insurance beyond what is offered by SGLI (only $400,000) may provide your family with a modicum of comfort and help to lessen their fears as you head into a hazardous environment. SGLI premiums are waived during deployment, which could free up additional money for other policies. However, after deployment, SGLI premiums resume.
Some life insurance companies will not insure deploying individuals because of the risk involved. Check with military providers like Navy Mutual – which doesn’t restrict or deny coverage due to military service.
Having a policy outside of SGLI can also ensure that you maintain life insurance coverage after you leave the military.
SGLI coverage will stop covering you when you leave the military – though you generally have 120 days of coverage from your separation date.
During this time – and for an additional year afterward – you can convert your SGLI to Veterans’ Group Life Insurance (VGLI). You will need to complete a medical exam to qualify for (VGLI) if you apply after 240 days of retiring or separating from the military. But, VGLI increases in price every five years according to age (e.g., you would pay $132 per month for $400,000 of coverage when you are 50 years old, but $240 per month when you turn 55).
Navy Mutual also offers affordable term life coverage you can keep through age 85 and Guaranteed Issue Flagship Whole Life, a permanent life insurance option offered exclusively to servicemembers who recently separated from service and their eligible family members.
Read more: Why You Need Life Insurance Beyond SGLI
When you make large purchases, you may do so as an individual, or you may make them jointly with another person by having both of your names on the mortgage. If you share a credit card, cosign on a loan or make purchases jointly, you both own the resulting debt.
If you have debt that will be inherited, it’s important to consider life insurance coverage in at least the amount of debt you have, so that your survivor will not be financially burdened.
Note: Federal student loans are generally discharged upon the death of the student. Many private student loans, however, do not offer death discharges. If you had a loved one act as a cosigner on a private student loan, they could be on the hook for making future payments. Talk to your loan servicer(s) to learn more about their policies.
Caring for Aging Family Members
Your children are not the only people who might be relying on your income. If you have aging parents, grandparents, or other family members you support, your life insurance coverage and beneficiary designations should reflect that.
Remember that your family members do not have to live with you to rely on you for support. If you help with grocery shopping or pay for home health care or a nursing facility care for members of your family, your income makes a difference and would be missed.
If you provide support like taking your loved one to their doctor’s appointments, helping clean their home, or cooking their meals, these are all services that would have to be replaced in your absence – and those services cost money.
Regardless of when you purchase life insurance, it is a sound investment in your future and the future of those you love.
Life insurance may seem complicated, but our representatives make it simple. If you need help determining what products would best fit your needs, you can call Navy Mutual at 800-628-6011 or schedule an appointment at your convenience.