Open enrollment season is just around the corner and now is the time to review your estate plan. That’s right, your estate plan. While it may seem odd to think about what will happen after you die when it is time to make health insurance elections, now is the perfect time to review your estate plan. Since your benefits are presumably on your mind, there is no time like the present to ensure they are set up the way you intend. Some questions to consider:
One of the most common oversights involves adjusting beneficiaries at life events, like a change in marital status. Even those who are the most excited about getting married or divorced often overlook this detail. While naming your parents or sibling(s) as your beneficiary may be honorable while single, most people prefer for their spouse to inherit their assets once they marry. Conversely, some divorcees would turn in their grave if they knew they forgot to update their beneficiaries and that their former spouse inherited their life insurance proceeds or 401(k). While unfortunate, these types of scenarios sometimes happen to the most well-intentioned people even though they could have been prevented.
Most employers allow you to increase your life insurance during open enrollment season. If you have health issues that make qualifying for coverage difficult, group plans provide an avenue to increase your coverage. However, if you are young and healthy, then shop around for a good term insurance policy outside of your employer. Term insurance is generally inexpensive and it can be used to take care of your temporary needs like income replacement to care for your minor children, debt elimination, and even college education expenses. Additionally, securing insurance outside of your employer provides flexibility. This way, if you and your employer ever decide to part ways, you will already have an existing life insurance policy.
Life is a journey. Plan for it.