There are many life events that impact your finances and affect your life insurance needs. Some of these life milestones are relatively small—like getting a salary increase or moving to a more expensive city. Others mark significant life changing events—like becoming a parent or losing a loved one. The important thing to be aware of is that proper financial protection can help you weather life’s storms. So, make sure you recognize the small and large life events and shift your financial planning (and insurance coverage) accordingly. Here are four major life events that can have a significant impact on your life insurance needs.
When you and your spouse legally join your lives, you become dependent on one another—and that includes financial dependence. As you go through life as partners and plan a future together, it’s important to set financial goals that will allow you to have the lifestyle you desire. Getting married is a life changing event for insurance needs. If you and your partner plan to share one salary, you should make sure that income is protected. If one of you brings debt into your marriage, the outstanding amount should be reflected in your life insurance coverage. Every marriage has a unique financial situation, so your life insurance policies should be tailored to the specific needs of you and your spouse.
Getting divorced or losing your partner is another life changing event for insurance needs. A divorce will mean separating your finances from those of your spouse and determining what changes you need to make in your life insurance coverage. Loss of a partner will mean accessing the partner’s life insurance benefit and determining what life insurance coverage you will need going forward. This is especially important if you have children, and it is also important if you have a home with a mortgage.
People are most likely to recognize that they need life insurance when they become parents. They are also likely to realize that the life insurance they have through work is not adequate. The ability to provide for your child is directly tied to your financial situation, and life insurance can protect the ability of you or your spouse to cover family expenses should something happen to your partner. Whole life insurance also provides cash value that you will be able to access to help pay for your child’s college education.1
It’s not mandatory that you buy a house, but becoming a homeowner is a common goal for a lot of people. Purchasing real estate is almost always done via a mortgage—a substantial debt that could take decades to pay off. A mortgage on a home is considered “good debt,” since it is an investment in your future, but it’s still a financial burden. You need to make sure that you or your spouse will be able to continue to pay the mortgage should something happen to your partner. Purchasing or updating life insurance when you go through the life event of becoming a homeowner is always a good idea because adequate life insurance coverage means that your family can remain in their home even if something happens to you. New York Life offers a variety of life insurance that can complement your existing life insurance coverage.
Transitioning out of work and into retirement marks another life milestone. If you’ve saved for retirement during your career years, you’ll now begin the process of turning your savings into accessible income. If you have whole life insurance, the transition will be easier. Your life insurance policy will provide a legacy for your loved ones, so you’ll feel less need to watch every penny. And if the death benefit is no longer needed, you can access some of your policy’s cash value to supplement your income during years when the market is down.1 New York Life and its subsidiary also offer income annuity products that can be used to create ongoing, reliable income that lasts for the rest of your life.
When you go through a major life event, speak with a New York Life financial professional about how your life insurance will be affected. With your agent’s help, you can create a strategy that fits your specific needs.
1 Accessing cash value reduces death benefit and available cash surrender value.