Re-Evaluating Your Life Insurance Needs

October 14, 2020 04:13 newlambertagency

If you have taken a life insurance policy, likely, you don’t think about it often. After a while, it seems like a car that drives itself. Life insurance gives you the security and peace of mind of knowing that your family would be financially safe in the event of your death.

But it’s crucial to not get too comfortable or fall into a sense of complacency as life, as we know, is pretty unpredictable. As the economy changes, so will your financial life changes and your life insurance needs.

To be on the safer side, it’s always a good idea to re-evaluate your life insurance coverage every few years, especially after major life changes, such as marriage, divorce, or having children. The changes could be good or bad, depending on your financial needs and condition.

Below are some of the changes to consider after reviewing your life insurance:

Buy more coverage

You may think there’s no reason to buy more coverage now. But what if you have more children in the future?  More children will add many years of child-care and education expenses. The most obvious way to secure more life insurance is to buy another policy that adds to your existing coverage.

It’s even better if your needs are specific. For instance, if you only want to cover the years of your child’s education or the length of a mortgage, then term life is the right type of life insurance for you.

Convert term life to permanent life

Most term life policies are convertible term life insurance. You can easily switch your term life policy to a permanent policy such as whole life or universal life depending on the company that issued the term life insurance.

You don’t even have to convert the entire policy. You can just convert a portion, such as $100,000 of a $1 million term life policy.

Cash-out a permanent life policy

If you feel like you don’t need to own permanent life insurance, you can surrender it for the cash value. However, the downside to this is that your beneficiary won’t be able to make a life insurance claim when you die.

Cashing out is a suitable option only if you have a permanent life insurance policy or you feel like you don’t need life insurance coverage anymore.

Sell your life insurance policy

If you don’t want your permanent life insurance anymore, there’s also the option of selling it. A third party can buy your policy at a price that’s more than the cash value and less than the death benefit. This transaction is called a life settlement. After buying the policy from you, the buyer then makes the premium payments and gets the death benefit when you die.

Before making any moves, do your research and talk to a financial advisor as it’s often difficult to tell whether you’re getting a good deal. You can sell your policy through a life settlement broker or through a life settlement company that buys policies.

And according to the Financial Industry Regulatory Authority, the transaction fees can cost up to 30% of the settlement.

Takeaway

Always remember to review your coverage and life insurance needs periodically, even if you recently bought a policy or you purchased one year ago.

Why Life Insurance Is (Even) More Essential During a Recession

July 23, 2020 11:32 newlambertagency

People often think that they should wait for the right time to purchase term life insurance or any other type of insurance. But what if the time is never right for you!

We always set a benchmark for our life – a stable job, marriage, or a promotion. But life waits for no one. There is never a right time when it comes to buying an insurance plan. The economy is always fluctuating, people are losing their jobs – at such an indecisive time it’s better to be prepared rather than waiting for a day that may never come.

You need to consider all the options to harness a safety net for you and for your family’s financial security and what’s a better option than taking up an insurance policy during a recession.

Why buy life insurance?

Apart from the obvious financial security, an insurance policy can help you transfer your savings from generation to generation and safeguard your assets whatever maybe the financial conditions.

An affordable term life insurance policy is a terrific option for those looking for the highest level of coverage possible for the lowest cost, for a specific amount of time. Some financial representatives suggest that you will no longer need life insurance when you are older.

Let’s examine a few of the facts about why and who needs life insurance.

Life insurance can help your family keep their home

Whether you’re paying rent or paying a mortgage, a term life insurance policy can help your family continue to make those payments after you’re gone.  This is crucial if you’re the primary earner in your house. Such kind of blanket protection would play a key role at the time of a recession as the chances of a family member losing their job is likely high which could, in turn, affect the overall household income.

Life insurance can help pay off debts

Recession leads to a lot of debt and if you somehow lose your job, you might find yourself turning to credit cards to cover everyday expenses — and, like many Americans, you might end up in a little bit of credit card debt.

A good insurance policy can help your family cover the outstanding debts (if any) if something were to happen to you. For instance, if you shared a credit card with your spouse, the proceeds from a life insurance policy can help you clear any outstanding debts after you die.

Life insurance keeps you prepared

If the recent pandemic has taught us anything it’s that the economy or the stock market isn’t the only unpredictable thing. You are never really prepared for every possible thing as it’s difficult to anticipate how the world will be in the next 6 months. Will we ever go back to the old normal? Will offices be reopened? Will the job opportunities improve after the dust settles?

The point is, the next few years might turn out to be nothing like we anticipated but that doesn’t mean we shouldn’t be prepared. An affordable term life insurance policy can provide you with much-needed stability even at difficult times. Determine how much coverage you might need and what it will cost using a life insurance calculator.

You just need to remember that you’re doing this for your family’s financial security and insurance policy just might be the key to rid you of any worries you might have about the future.