From the December 2016 issue

3 New Year’s Resolutions to Protect Your Family

Spending less time on your phone, getting in shape or sticking to a budget might be moving up on your to-do list at this time of year. Whatever your goals, the start of a New Year is a natural time for resolutions.

But for parents, the most important resolutions for your family might be the ones you never even considered.

Taking care of your insurance needs and estate planning – often neglected until something bad happens – can mean that no matter what 2017 brings, your family will be protected.

“You typically see people coming into the New Year with new financial plans, trying to reevaluate their financial situation, their protection,” says agent Nicole McCoy with Michigan Term, a life insurance brokerage firm in Troy that caters to families. “Everybody’s around their family this time of year, so it may spark your brain to think, ‘Hey, we should be taking care of these sorts of things.’”

Here are three important steps you should take action on at the start of the year:

1. Review or create your estate planning documents.

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All parents need a will that specifies who the guardian of their children would be in the event of the parents’ death.

“A lot of people don’t have a will. You see this in celebrities and regular, everyday people,” McCoy says. “If you do not have a will, the state decides where your estate goes.”

Parents should also consider whether they need to create a life insurance trust for their children.

“If you have minor children, you are typically advised to have a trust,” she says. “If you were to die tomorrow the death benefit would go to your trust, not the minor children.”

2. Review your life insurance.

Do you have the coverage you need? Are your beneficiaries up to date? A quick review of your life insurance won’t take long and could even save you money, like if you’ve quit smoking or have lost a significant amount of weight.

“It’s possible to get cheaper rates the healthier you are,” McCoy says. “You’re making those life changes that are in essence going to prolong your life.”

Or you might need more coverage now than you did when you first bought your policy.

“Say you bought a new house and you just got a $230,000 mortgage. That $100,000 policy you bought 10 years ago isn’t going to cover your mortgage payment if something were to happen to you,” McCoy points out. “Life changes, you bought a new car, your kids are now in college. A new house, a second house. You want to have some kind of coverage in the event that you die and to cover those more expensive bills that you may have accrued.”

3. Review your disability insurance.

Michigan Term offers life insurance along with short- and long-term disability policies. The New Year is a good time to check if you have sufficient disability coverage through your employer and consider buying your own policy if you don’t.

“Most people get offered a short-term disability group policy through their employer,” McCoy says, but “group policies typically aren’t as much in benefits – employer paid DI benefits are taxable, so there may not be enough monthly income after tax. Also, employee paid DI isn’t portable, so you lose it if you switch jobs.”

If that won’t cut it for your monthly obligations, an additional policy could be a valuable investment.

“The small amount through your employer may not last you long enough to see you through your coverage,” she explains.

No matter what you decide, the name of the game is being prepared.

“Life changes quickly. Most people have a different story than they did 10 years ago,” McCoy says. “Most people don’t think to look at these things until it’s too late. Everybody’s trying to do a little bit better for the end of the year. You might as well look at your finances while you’re there.”

For more information, visit Michigan Term online at michiganterm.com or call 888-242-9644.

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