Life Insurance: Do You Have Enough?
At GBU Life, we encourage our members to review their current life insurance policies to see if they need to add to the face value or consider additional rider options or even different policy types, depending on their phase of life.
One of the key phases of life where families often find themselves underinsured is during the "busy years." Usually, between the ages of 25 and 55, you are working hard to build a life for yourself and your family. This is the time when you are building income and starting savings. You may be paying a mortgage and raising children. College tuition may be looming (or you still may be paying for your own).
Here are some things to think about to ensure that you have the right amount of coverage during this very busy phase of your life.
Buy whole life coverage as early as you can
You will never be younger than you are right now, so if you are also in good health it is the perfect time to purchase a life policy with a guaranteed renewal option rider. Buying a smaller whole life policy now and adding more coverage during guaranteed purchase periods (as you are able) helps you to build your coverage over time. It also ensures that you are able to grow your coverage even if your health should decline in the future.
Use term coverage to fill in the gaps
Be sure to consider what your life will look like for the next 20-30 years. Consider long- and short-term debt such as a mortgage, student loan debt, future college tuition and childcare. Be sure that if the worst happens, your family will be able to pay off debt and replace lost income. Often the term insurance offered through your employer is not enough to cover these expenses. Be sure to complete an analysis with your agent and supplement with additional term insurance during these years.
Plan for the "what if's"
Review the rider options for both your whole life and term policies. Rider options can really help you to mitigate risks that come with uncertainty. For example, a children's term rider automatically covers all current and future children for one price. Living benefits riders allow you to use some of your life insurance benefit in advance if you meet certain medical criteria, such as a terminal or critical illness. Other options such as waiver of premium or borrowing from the cash value that builds as part of a whole life policy can help you should you run into a period of financial struggle along the way.
If you are ready to review your life insurance or if you are ready to get started with a policy, you can request an appointment at gbu.org.
