By Deborah Jeanne Sergeant
Of all the insurance you will ever buy, life insurance is the one you will definitely use. But like all insurance, you should periodically review your coverage to ensure it still meets your needs.
Daniel Cuddy, personal financial representative and certified financial planner at Cuddy Financial Services in Auburn, said that checking policies annually is a good idea.
“It is an excellent time to review all of your beneficiary designations on your life insurance policies and retirement plans, such as your 401(k)’s, 403(b)s, deferred comp, and your employer’s retirement plans,” Cuddy said. “There may have been life changes since the last time that they were updated or designated initially.
“You should check with your company or investment company that holds your retirement plan assets to determine who the current beneficiaries are.”
Consider factors such as the beneficiaries’ needs. If your children have become more financially comfortable and in less need of help, consider designating some assets to important charitable causes.
Those purchasing life insurance should consider how their demise would financially affect their family members left behind, since they would have to deal with the costs for their burial, debts and the loss of income to the household.
“At this age, people don’t think about the need and purpose for life insurance,” said Christopher W. Rheaume, accredited asset manager specialist and financial adviser with Edward Jones in Auburn. “Someone may not even need the life insurance anymore or they may need to adjust the type of insurance.”
For example, insurance that includes riders to cover long-term care expenses may be more important at this point than only coverage related to income replacement for some families, especially when a household has two income earners and the children have grown. At this point, looking at end-of-life needs is important.
Grandparents who provide regular childcare for their working adult children should consider what their passing would mean to their grandchildren’s care. Would it make sense to designate more assets to those families than to a single adult child with no such responsibilities? Fair does not always mean equal division of assets.
“For us as financial advisers, we have to evaluate the whole picture to know the type of life insurance you should have,” Rheaume said. “It’s easier if you have two kids under 5. As you get older, goals and objectives change.”
That is why advisers look at the needs of the family to strike a balance between supplying those needs and maintaining affordable premiums for the policyholder. Advisers also look at the objectives of the policyholder.
“We truly believe in customizing a strategy,” Rheaume said. “We want to understand what’s most important to you, develop a customized strategy to help you achieve your goals. We partner with people to help them reach their goals.”
If you think it is too late to buy life insurance, you may be wrong. Some policies are available in New York for people up to age 85. Factors such as health conditions, current age and tobacco use are what underwriters scrutinize to determine eligibility and rates.
Although life insurance generally costs less for younger people, it’s not too late for anyone 85 and younger. Discussing what is available with an insurance agent can uncover what options are available for an individual.