If you have a wife and children, you will most definately want to opt for more life insurance. Should something ever happen to you, your children will undoubtedly be your spouse's biggest expense. Your spouse will have to provide your children with food, clothing, toys, braces and perhaps a college education. You want to make sure that you have enough life insurance to cover these costs and maintain an acceptable standard of living. Naturally, the more children you have, the more expensive it will be and the more life insurance you will need.
Beneficiary Designations
Your spouse should be named as the beneficiary of your life insurance policy in order to receive payment if you die. Even if your will says that your spouse is the beneficiary of the policy, it will not take precedent over the policy's beneficiary designation. If you have children, you may want to include them as well. For example, you can name your spouse as primary beneficiary and your children as secondary beneficiaries. A secondary beneficiary is the person who will receive payment if the primary beneficiary dies before you. Naming both your spouse and your children as beneficiaries can make it easier for your children to collect if something happens to you and your spouse at the same time (e.g., if both of you die in a plane crash).
However, keep in mind that courts will not allow minor children to directly receive the proceeds of a life insurance policy. You will need to set up a trust to receive any payment for the benefit of your minor children and name a trustee to manage the trust for the children.
If You Already Have Life Insurance
If you already own a life insurance policy when you get married, you should do the following:
* Review the beneficiary designation (e.g., you may want to name your spouse as the beneficiary)
* Review the adequacy of your coverage (e.g., depending on your situation, you may need more coverage than you did when you were single)
Life Stages
single | married | new baby | family | | retirement