Life Changes, Your Insurance Should Too

You may think that once you obtain health insurance through your employer, you’re all set for a while. You may think it’s fine that when you move on to get a life insurance policy of your own, you can keep that in place without a second thought. We all know that these are not sufficient practices when you’re tasked with managing and planning for the well-being of yourself and the well-being of your family. Your life changes beyond your first job, your first car and your first house. So why shouldn’t your insurance follow suit?

It isn’t hard to adjust your insurance policies as your life matures, but it can be difficult to remember to do so or to find a trusted advisor who can help you make educated decisions about supporting the bigger changes in your life. Let’s review some of these changes so that you have a framework for understanding how your insurance is affected with each event and what you can do to prepare.

Getting a New Job

Getting that new job should send off a red flag in your brain that it’s time to review your life insurance and health insurance, especially if you’re in a relationship with only one employed partner. Take a peek before you start the job search so you’re familiar with your situation, and as you accept the offer, make sure that your life insurance follows your new income, giving your spouse a better chance of making any house or child expenses work in the event of your passing. Remember that most positions also have a waiting period for new health insurance qualification, so you’ll need to ensure coverage in the meantime. Moving your existing 401k to your new place of work or continually contributing to a new plan may seem like a challenge as well, but taking proper care of your retirement investment is a necessary step in leading a comfortable life in the long term.

Here’s What to Do: Take a closer look at your life, health, vision, dental and disability insurance and see what comparisons you can make between your current coverage and what your new job puts on the table. Don’t forget to determine what insurance and benefits are able to follow you from your old job to your new one and any time limitations for opting in that go along with them.

Buying a New Car

Whether it’s for yourself or your teen, buying a car has the potential to be both an exciting event and a stressful one if you’re unprepared. If you’re young, getting your first car may be the very first experience you have with insurance, and speaking to an insurance agent, reviewing rates, securing a plan and keeping up with payments on your own for the first time can be overwhelming if you’re tasked with handling the process on your own. Many teens are covered under a parent’s car insurance plan, which is often a cost-saving option, but it’s important to review that plan and understand that teens carry higher risk when it comes to automobile accidents. If you’re an adult and this isn’t your first vehicle, you’ll also need to make sure your current coverage reflects the needs of your new car and your life and career circumstances.

Here’s What to Do: It’s a best practice to reevaluate your auto insurance coverage and evolving needs every year at a frequency that makes sense to you. This is because the changing rates are dependent on a variety of factors, and if you’re buying a new car, those rates can be influenced by that car’s make and model, safety features and more. If you already have auto insurance, review your current policy and speak to an agent to find the best rate for the new car’s specifications and needs and the discounts that might be available to you. If you’re buying auto insurance for the first time, get help in shopping around for a policy that fits your financial situation, risk tolerance, location and other important factors you may not think to consider.

Renting, Owning or Renovating a Home

Homeowner’s insurance goes along with obtaining a mortgage, but renter’s insurance is another protection option for your new address that is smart to consider if you don’t have your own place. For new homeowners, it’s best to care for your big investment by exploring coverage options for fire, flood, theft and other types of risks and devastating damage. Consult with an insurance agency to weigh your unique risks and determine what protections you’re willing to prioritize. Renovating a home comes with its own added risks, too, so don’t forget to check your insurance status before doing the work to see where you’re already secure or where you can add additional options.

Here’s What to Do: At this stage of life, you’ll want to review your life insurance and disability insurance in addition to obtaining homeowner’s or renter’s coverage and umbrella coverage. While it may be difficult to consider, it’s important to take seriously the effect that losing one spouse can have on the other when they’re left with a house to manage and pay for through mortgage.

Getting Married

Insurance on the engagement ring is one thing to keep in mind during proposal time, as it is typically an expensive asset to hold on to, but sealing the deal itself leads to more complications when it comes to insurance. Because you’ll likely be combining living spaces, cars and other important assets, you need to come together to start making big decisions about several different types of insurance and you may need to get life insurance for the first time to better secure your separate futures. Now’s the time to put some of your romantic emotions aside to speak frankly about your future together.

Here’s What to Do: Sit down with your partner to speak more concretely about your life goals and dreams, plan for life insurance coverage so you can live them out, look around for benefits that may come in combining coverage, weigh your options about joining health insurance plans and get real about your existing debt. After a preliminary talk, you can get more seasoned advice from an insurance professional about what would make the most sense for you as a couple.

Having a Baby

Having a baby or planning to adopt? Time to think about protecting the newest addition to your family, whether you’re single or part of a twosome. This is when life insurance takes on more importance and financial planning comes into play to secure the future of your child and map out college funds. Having a baby is a large and long-term financial responsibility to take on, which is why consulting an insurance agent should be seriously considered as you take the next steps toward family planning. Think about your financial status and prepare to make some adjustments to your life and health insurance.

Here’s What to Do: Plan ahead of time to change up current coverage and add your child onto your health plan. This may mean increasing your life insurance policy to cover the costs of raising your baby and covering medical and child care costs. You’ll also want to make sure to thoroughly review, plan and enroll on time for health insurance for your child so that you don’t risk leaving them without coverage until the next enrollment period.

Making Bigger Purchases

So you’ve come to a time in your life when you’re ready to buy the boat you’ve always wanted to fish on during the weekends or the ATV you’ve always wanted to ride as a kid. “Toys” like these fit into the same category as vacation homes, expensive cars, antiques and collector’s items—they’re all considered big purchases to make, and they all should be protected under an insurance policy if you consider them well worth protecting. Before you move to make that purchase, you should evaluate the need for extra liability insurance.

Here’s What to Do: Speak to an insurance agent about your possible purchase and find out if you should seek umbrella coverage. Think about how much you’re willing to spend to protect your newest toy and how much it might cost to fix any damages or replace your purchase when an accident happens. Your agent should also be able to help you develop a sound plan for making and safeguarding more big purchases in the future.

Planning for a Divorce

It won’t be the greatest or healthiest period of your life, but getting a divorce can help you live a happier and healthier existence in the long run. As best as you can, make a smoother transition to the next stage of life by bringing more structure to the long list of to-dos that accompany a divorce. One crucial step in doing this is getting in touch with an insurance agent to figure out what needs you may have to meet and what new coverages you’ll require for yourself.

Here’s What to Do: If there will be long-term obligations as a result of your divorce, you might be required to list your soon-to-be ex-spouse as a beneficiary on your life insurance, but if not, you’ll want to remove them when the time comes. Look into disability coverage ahead of time for yourself or your spouse if you will have child support and find out if you need to setup or tweak your health insurance coverage. Car insurance and homeowner’s insurance providers also need to be alerted of the big change to remove a spouse from the policy.

Dealing with Loss and Loved Ones

The last thing you want to do when the dealing with the loss of a loved one or contemplating your own passing is handle insurance. It’s a gloomy topic, but you need to take care of yourself to lead a good life after loss and you want to secure the future of your family when you’re gone. Taking steps to correct or adjust a range of policies is the right thing to do for everyone, but it can be tough to get that task started.

Here’s What to Do: If your spouse has passed away, contact your auto insurance provider to look into the possibility of a waived premium and cancel life insurance if it was intended to protect your spouse. If you are making preparations for retirement and distributing your estate, find out if you should switch up your health insurance. Get as much support as you need during these times to make the best short- and long-term decisions.

What stage of life are you at right now? Are you contemplating a big move, planning for a big purchase or readying yourself for a life-changing event? Think about the possible ways in which the milestones above relate to your current situation and near future, and take time to weigh your options for coverage to lead a safe and happy life. For expert guidance, get in touch with the team at GMG Insurance Agency to discuss your dreams and insurance needs today.

Sources:

  1. 4 Life-Changing Events that Affect Your Life Insurance, McClone
  2. The Best Times to Evaluate Your Car Insurance, Progressive
  3. Life Changes That Affect Your Insurance Plans, FPA
  4. 5 Crucial Insurance Changes After Divorce, nerdwallet