By financen | January 18, 2019 - 2:22 pm - Posted in Insurance, Life Insurance
Life Insurance

When you buy life insurance, it’s hard to determine how much you’ll need later on in life. Each year our lives can drastically change, causing us to review and rethink some of our expenses and insurances. Life insurance is one coverage that should evolve as you evolve.

Depending on your coverage, you may want to consider either increasing or decreasing your coverage according to where you’re at in life. There are certain signs to pay attention to that may tell you to reconsider what your life insurance policy is.

You Have Children

If you bought life insurance before you had kids, it might have been suitable for that moment in life. However, if later down the road you started to have children, your insurance may be outdated.

When we buy life insurance, it’s more for your family’s protection than anything. They would be the ones who utilize the death benefit if you passed away. If you have children, they’ll likely need more money to help cover costs and continue with life.

Your Health and Lifestyle Changes

Your lifestyle and health could be a sign that you need to either increase or decrease your insurance. The downfall, however, is that if your health declines, it will cost you more in monthly premiums. Americanterm.com has more information on how your health, like weight, affects your life insurance.

You Purchased a Home

If you recently moved into a new home, that is a good time to review your life insurance policy and consider increasing the death benefit. Moving into a new home can be expensive for quite some time. If you suddenly passed away, would your family be able to afford the mortgage and continue living there? Would they have to move out and look for something smaller?

The death benefit can help your family cover costs that your income used to help with. By increasing your coverage when you purchase a new home, you’re helping to guarantee that your family will continue to live in the family home.

Increase in Income

Have you gotten a raise recently? That is a good sign that you should look at increasing your life insurance policy.

Ask yourself this – would your family be able to live without your income? If the answer is no, you know that you need life insurance to cover the loss of the primary income. So, if you got a raise, you’ll want to increase the death benefit so that it matches you and your family’s lifestyle.

Fell Into Debt

Debt is one of the main reason why some families get life insurance. The death benefit could help cover the debt left behind a family member that passed away. Even though that family member is gone, the debt still has to get paid.

If you fell into debt recently, you may want to consider increasing your coverage for the time being. The more debt you have, the more that will fall on a family member if you suddenly passed away.

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Life Insurance

Life Insurance

One of the main reasons that lead people to take out life insurance is to provide a beneficiary with the proceeds of the policy when the named insured passes away. However, many times, there is more than just one beneficiary and here is where confusion takes place. If you are considering buying life insurance, or if you have already a life insurance policy, this reading can help you to clarify what is contingent beneficiary and how to add this beneficiary to your life insurance policy.

  • Understanding the Different Types of Beneficiaries

Know there are not as many type of beneficiaries to make more confusing this topic, but there are certainly two types of beneficiaries: primary and contingent. The primary beneficiary is entitled to receive the proceeds at the death of the insured person and this beneficiary can be a specific person or a group of people that is properly called a class designation.

A contingent beneficiary, or secondary beneficiary, is entitled to the proceed of the insured individual only if the primary beneficiary passes away before the insured person, and it is possible add more that a contingent beneficiary to a life insurance policy to make sure there will always be a beneficiary that is going to receive the proceeds.

  • Why a Contingent Beneficiary is Often Necessary

The primary beneficiary could be anyone, but often the closer is the relationship between the insured person and the beneficiary, the more important that is adding a contingent beneficiary or beneficiaries to a policy. In example, if you are too young and single you might be entitling your parents to receive your proceeds, but eventually you can marry and add your spouse as contingent beneficiary, and then your children as tertiary beneficiaries or vice versa.

  • Who Will Receive My Proceeds?

Either in wills or in life insurance, the primary beneficiary is who receives all the proceeds or assets that the person who have died has left. A contingent beneficiary will not receive anything unless the primary beneficiary dies before the insured person, and yet subsequent beneficiaries will not receive anything either unless both the primary and contingent beneficiaries pass away before him or her. Attorneys and life insurers may help you to find a workaround to make possible all the beneficiaries receive a part of the assets or a proceeds share, but this situation needs to be discussed directly with them to leave everything according your wishes.

  • Adding a Contingent Beneficiary to Your Policy

You can add a contingent beneficiary at the moment to take out your life insurance, or at a later time. Insurance companies will let you know about the importance to review and update periodically your life insurance policy, moment at which you can request the addition of the contingent beneficiary. Updating your beneficiary designations can happen as often as you need to make changes, but keep in mind that in some states is only allowed name your family and relatives as beneficiaries, and that naming children will require that you appoint a tutor or guardian until they reach adulthood.

Helpful Articles:

http://www.benefits.va.gov/insurance/

http://en.wikipedia.org/wiki/Life_insurance

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