Life insurance is one of those things that can be uncomfortable to think about. And, let’s face it — we all have bills we can’t avoid, and most of us would probably rather not pile onto our existing expenses by adding life insurance premiums into the mix.
But there’s a reason an estimated 52% of Americans have a life insurance policy in place, according to a recent study.¹ Having that coverage could protect your loved ones if something happens to you and they no longer have your income for financial support.
Life insurance needs change based on major life events, so it’s important to review your coverage regularly. Here are 5 important tips to ensure you keep up with your ever-changing needs.
5 Tips to Evaluate Your Life Insurance Needs
1. Make note of your major moments.
It’s important to reassess life events that may require changes to policy coverage such as:
Accruing new debt
Buying a home
Changing jobs
Getting married
Having health changes
Planning to retire
Receiving an inheritance
2. Analyze your life insurance policy.
Reexamining life insurance coverage annually is helpful. Key items to examine are:
How much do you have?
Who is covered?
What kind of policy will suit me best?
Are you paying for any supplemental insurance?
If so, how much coverage does it offer?
These questions will help paint a picture to evaluate all of your options.
3. Ask yourself: Is my FEGLI coverage enough?
Perhaps you have Federal Employees Group Life Insurance (FEGLI) coverage through your agency. The coverage may not be enough and does not guarantee you and your family will have adequate coverage.
Additionally, if you leave federal service, your FEGLI coverage does not travel with you. That’s why an individual policy through a third party may be beneficial as you’re in control no matter what happens with your job.
4. Evaluate your costs.
FEGLI coverage consists of Basic life insurance with three forms of Optional insurance available. With all three options (Options A, B, and C), the cost on each adjusts in 5-year increments after age 35. However, the private insurance market is available as an alternative with rates that are much more manageable.
I recommend at least taking a look at your life insurance options in the private market, since the rates you can receive may be substantially lower and the money saved could be significant.
Whether it’s FEGLI or a private product, employees must be careful to select affordable coverage when they retire, and before making a retirement election, understand what is available and how much you will have to pay monthly for the coverage you desire.
5. Take the time for what matters most.
Keep your family protected with just a little extra effort with ample life insurance coverage. By taking extra time to examine your policy, you’ll have the confidence of knowing how much coverage you should have to help protect those most important to you.
Even if you feel that you have enough life insurance, I encourage you to take another look to ensure that you have the right FEGLI options for you and the coverage to suit you and your family’s needs.
Life insurance needs change based on major life events, so it’s important to review your coverage regularly.
Source: ¹2024 Insurance Barometer Study, Life Happens & LIMRA
About Chris Kowalik
Chris Kowalik is a federal retirement expert and frequent speaker to federal employee groups nationwide. In her highly-acclaimed FedImpact Workshops, the FedImpact Podcast, and the FedImpact Webinars, she empowers employees to make confident decisions as they plan for the days when they no longer have to work. Chris’ candid and straightforward nature allows employees to get the answers they need and understand the impact these decisions have on their retirement.
DISCLAIMER: The information presented on MyFederalRetirement.com is provided for general information purposes. The information has been obtained from sources considered to be reliable. The information is offered with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. For more information, please read our Terms of Service.
