Major Life Events and Life Insurance

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Life happens, and sometimes it's not in accordance with our personal plans. At the end of last year, I got a not-so-subtle reminder in the form of open-heart surgery.

While health and money are both high priorities for most people, that experience drove home -- at least for me -- the primacy of health. Thankfully, with the help of a great medical team and the support of my family, I am feeling better and better with each passing day.

Here's a piece of non-financial wisdom: Don't skip those annual checkups. I was lucky to have about a two-month warning prior to my surgery. That gave me plenty of time to get all my ducks in a row. Grim as it was, I reviewed all of my estate planning documents and made sure my wife was in sync with the who, what and where of the various insurance, investment and benefit programs that might come into play, and the key people she would need to contact ... just in case.

I also double-checked all my beneficiary arrangements. When they got ready to wheel me into the operating room, I was worried, but not about the financial well-being of my family.

When it comes to major life events, sometimes you have the luxury of planning things out in a very intentional way. But sometimes you don't. That uncertainty puts a premium on keeping things up-to-date as part of your normal routine. With life insurance, that means ensuring that your coverage -- both the amount and the type -- reflect your current situation and wishes.

What's good today may not be tomorrow.

Here's a quick look at several life events that should have you reassessing your life insurance:

  • A family addition. Kids cost money. You're probably thinking, "Thanks for that pearl of wisdom, JJ." It's been a few years since the USDA published its last "expenditures on children" report but, back in 2017, the number was about a quarter of a million dollars. And that was only through age 17, leaving out the cost of college. Clearly, a new child should cause you to relook at your life insurance.
  • Deployment. Deployments are a unique military life event and, as you know, they aren't uncommon. Ensuring you have adequate life insurance should be part of your family's pre-deployment checklist. There are several online calculators that can help you with that task.
  • Buying a new home. One of the primary purposes of life insurance is to pay off debts. For most of us, a mortgage represents the biggest liability we will ever have. Is paying off a mortgage part of your plans for life insurance? If so, a new home could mean you need to bump up your life insurance coverage.
  • Leaving the military. Separating or retiring from the military will likely eliminate the $400,000 of life insurance provided by Servicemembers Group Life Insurance (and possibly up to $100,000 of Family SGLI). You don't want this to throw your insurance situation off kilter. If replacing SGLI or upping your life insurance upon leaving the military is part of your transition plans, it can take time. Begin the process at least six months before you anticipate separating. You may be eligible to purchase VGLI for up to 18 months after you leave the service.
  • Making a job change. As a military spouse, your employment may also provide life insurance benefits that need to be replaced if you switch employers. Service member or spouse, having portable insurance that's not tied to your employer can provide important flexibility.
  • Marriage and divorce. In either case, life insurance deserves attention. While the amount of coverage is key, as part of your review, you'll want to ensure your beneficiary arrangements match your current wishes.
  • Serious illness or injury. Military service comes with the real risk of illness or injury that can affect your access to commercial life insurance. Programs like SGLI and Veterans Group Life Insurance have provisions that can help. You may also want to look at adding additional life insurance to create flexibility in your plan.

If you have one of these on the horizon or are surprised by one, life insurance may not be top-of-mind, but make sure it's on your list..

Get the Coverage Your Family Needs

FSGLI, TSGLI, VGLI, SGLI ... the long list of acronyms and bare minimums may not be enough to cover your family's needs. Explore life insurance options with our free tool, which compares rates and matches you to the coverage you want.

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