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You may know that you should review your life insurance when you experience major life events like buying a home, getting married and starting a new job. But what about the not-so-obvious moments—especially when the COVID-19 pandemic has upset so many plans? These nine events are also important times to revisit your insurance.
In 2020, more than 50 million adults in the United States were caregivers (someone who provided care to an adult or a child with special needs at some time in the past 12 months), according to research from the National Alliance for Caregiving and AARP. With the impact of the pandemic, especially on the elderly, caregivers feel even more pressure in their roles.
Caring for ill family members, such as aging parents, is no easy task—especially if you become their sole provider. Think of this life event as being like adding a child, or dependent, to your family.
Like most dependents, ill family members may need you for financial support—and this may take a chunk out of your future savings. Increasing your life insurance policy can help offset some of these costs.
And if something should happen to you, the planning you do to provide for family members becomes even more important. There again, life insurance can provide protection and peace of mind.
When you’re preparing to send your kids to college, consider the tuition and additional expenses: groceries, school supplies, rent, utilities and so on. Review your life insurance policy to ensure it will cover these extra costs if something happens to you—and if it doesn’t, increase your coverage.
You could also consider the option of withdrawing from your policy’s cash value if you need help covering the costs. (Benefits paid from life insurance generally are tax-free and do not count against the student’s eligibility for financial aid.) But always talk to a life insurance specialist first to make sure it’s the best decision for your family.
If you’re having a baby, you’ve likely already reviewed your life insurance policy. But if you’re the grandparent, it may not occur to you to do the same. Even though your grandchildren are not your children, your family is still growing, so you may want to increase your life insurance coverage as well.
Many grandparents also gift their grandchildren life insurance policies to help them build financial security for the future. Generally, these policies transfer when the child turns 21—and they can either cash out the policy or continue the coverage. These policies usually come with a high value at a low cost. And depending on the type of policy, the premiums may not change as the cash value grows.
Downsizing your home is a life event when you should review your life insurance policy. If you’re cutting expenses, you may be able to downsize your policy as well.
With many schools having switched to online or hybrid instruction because of the pandemic, some parents who haven’t been able to work from home have decided to leave their jobs and stay home with their children. If you decide to become a stay-at-home parent, review your life insurance policy. Although being a stay-at-home parent is full-time work, it’s smart to think of this as being (in terms of income) unemployed—and take into account that your family will be living on less income.
When this happens, consider increasing your policy in case something happens to remaining sources of income—or to the stay-at-home parent—because new expenses, such as child care, might appear.
One common time to review your life insurance is when you buy a house—but that’s not the only major purchase that should prompt a review. Other major expenses should work the same way.
These expenses could include a second home, a more expensive home, a new car, a big loan for college or even refinancing your house. Just as decreasing your debt allows you to reduce your coverage, increasing your debt may mean you need more coverage.
If you’re a life insurance policy beneficiary of someone who recently passed away, you’ll likely receive an inheritance. While the extra money is helpful in a time of grief, it’s also an indicator to that you should review your finances—including your insurance policy.
When you’re grieving a loss, your life insurance policy is probably the last thing on your mind. But if someone you designated as a beneficiary passes away, you’ll need to review your life insurance policy. To change the beneficiary, contact your life insurance specialist.
Starting a new job? Buying a house? Renting your first apartment? Get tips on how to budget for your next big move!
Get tipsGetting a promotion is an exciting milestone—but after you celebrate, take time to review your life insurance policy. With that promotion comes an increase in income—and that may mean an increase in expenses. So when you get that well-deserved promotion, consider increasing your life insurance policy to match your new lifestyle.
Be prepared!
Discover what AAA Life’s insurance options have to offer.
This information is being provided for general informational purposes only. The Auto Club Group does not assume any liability in connection with providing this information.
Life insurance underwritten and annuities offered by AAA Life Insurance Company, Livonia, Michigan. AAA Life Insurance Company is licensed in all states except NY. CA Certificate of Authority #07861. Products and their features may not be available in all states.
AAA Life and its agents do not provide legal, tax or financial advice. Please consult your professional advisor prior to the purchase of any policy or contract.
This is a summary of product provisions and does not contain all of the benefits and exclusions. For complete terms of the insurance coverage or annuity, please contact your agent or refer to the policy/contract.
Annuities - LA
Annuities are not short-term products. During the surrender charge period, withdrawals exceeding 10% will be subject to a surrender charge that may be higher than fees associated with other types of financial products and may reduce principal. Withdrawals prior to 59½ may be subject to IRS penalties, separate from the annuity’s schedule of surrender charges.
EliteGuarantee Deferred Annuity - LAEG Contract Form Series: ICC11-4101/DA-4101 (In OR: ICC11-4101)
Platinum Bonus Annuity - LAPB Contract Form Series: ICC11-4111/DA-4111 (In OR: ICC11-4111)
Guaranteed Income Annuity - LAGI Contract Form Series: ICC14-4120/SPIA-4120 (In OR: ICC14-4120)
The payout amount you will receive is based on your individual circumstances, the options you select at the time of application and your initial premium payment.
Term Life Insurance - LT
Premiums are guaranteed. They are level for the term period and increase annually thereafter. Any sample premiums are examples only and may vary based on your personal health history and underwriting guidelines. The answers provided to the health questions are used to determine eligibility for coverage. Not all applicants will qualify. Product and its features may not be available in all states. Coverage ends at age 95.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
ExpressTerm - LTE Policy Form Series: ICC19-1601/1601 (In OR: 1CC19-1601)
Traditional Term - LTT Policy Form Series: ICC19-1801/1801 (In OR: ICC19-1801)
Group Direct Term Policy Form Series: GT8200
Individual Direct Term Policy Form Series: ICC16-1501
Universal Life Insurance – LULG
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Lifetime Universal Life Insurance - LUL Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-4701/4701 (In OR: ICC19-4701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (7% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Accumulator Universal Life Insurance - LULA Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-3701/3701 (In OR: ICC19-3701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (5% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Whole Life Insurance
Whole Life Insurance (for coverage amounts of $30,000 or more) - LWL Policy Form Series: ICC18-5601/5601 (In OR: ICC18-5601)
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Rapid Issue Whole Life Insurance (for coverage amounts of $25,000 or less) - LRIWL Policy Form Series ICC20-7001/7001 (In OR: ICC20-7001)
Responses to the application will be used to determine approval for coverage. Not all applicants will qualify.
This Whole Life policy is referred to as graded benefit whole life insurance. If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the base premiums you paid, plus 35%. After two years, the total amount of your coverage is paid for death due to any cause.
After the first two years of coverage, if insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Guaranteed Issue Whole Life Insurance - LGIWL Policy Form Series: ICC16-6301/GWL6301 (In OR: ICC16-6301)
The maximum amount of Guaranteed Issue Whole Life insurance coverage per insured is $25,000.00. Subject to age requirements and policy limit restrictions.
This Guaranteed Issue Whole Life policy is referred to as graded benefit whole life insurance. If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the level monthly premiums you paid, plus 30%. After two years, the total amount of your coverage is paid for death due to any cause.
If you are a California resident 65 years of age or older, we are required to advise you of the following. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product may have tax consequences, early withdrawal penalties, or other costs or penalties as a result of the sale or liquidation. You may wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold
ALAN-29546-624-XX
