August Is National Make-A-Will Month: Time to Check Your Life Insurance
Most people buy a life insurance policy, pick a beneficiary, and then never look at it again. But life changes a lot. You get married, have kids, buy a house, get divorced, or lose someone you love. August is National Make-A-Will Month, so it’s a good time to stop and ask: does my life insurance still match my life right now?
It’s easy to put this off. Your policy just sits there quietly for years. Nobody really checks it unless something happens. And that’s the problem. The one time it truly matters is also the worst time to find out something is wrong.
Your Will and Your Life Insurance Need to Match
A will says what happens to your stuff. A life insurance policy says who gets the payout. Those are two different papers, but they need to agree with each other. If they don’t, your family can end up confused, or even stuck dealing with a legal mess, even if your will itself is crystal clear.
The Biggest Mistake People Make
The most common mistake is forgetting to update who’s listed as your beneficiary. The insurance company pays out to whoever is named on the policy. It doesn’t matter what your will says. That means:
- An ex could still get the payout if you never changed it after a divorce.
- A new spouse, or a kid born after you bought the policy, might not be covered at all.
- If you list a minor child directly instead of a trust or guardian, things can get messy fast.
A Real Example
Say someone bought a policy in their twenties and named their sibling. Fifteen years later, they’re married with two kids, but they never updated it. If something happened today, the money would legally go to the sibling, not the spouse or kids. It wouldn’t matter what the will says. This kind of thing happens more than you’d think.
How Much Coverage Do You Actually Need?
While you’re at it, it’s worth checking if your coverage amount still makes sense. Maybe you bought your policy back when you had a smaller salary and no kids. A simple rule some people use is around 10 to 15 times your yearly income, plus whatever you still owe on your mortgage or other debt. It’s not a perfect formula, but it’s a good gut check.
Make It a Habit
Estate lawyers usually say to check your will every three to five years, or after any big life change like marriage, divorce, a new baby, buying a house, or losing someone close to you. Your life insurance deserves that same check. It only takes a few minutes to log in to your account or call your agent.
What to Check This August
- Who’s listed as your beneficiary on every policy you have.
- Your backup beneficiary, in case something happens to the first one.
- Whether your coverage amount still fits your life today.
- Who would take care of your kids if something happened to you.
- Whether a trust makes more sense than naming a person directly.
If it’s been a while since you checked your policy, now’s a good time. Want help going through your beneficiaries or figuring out how much coverage you actually need? Contact Capps Insurance today. We’ll walk you through it, no pressure and no confusing jargon.
