Do You Still Need Life Insurance if You're Widowed?

As your life changes, your financial needs change as well. Re-evaluating your insurance coverage after your spouse has passed away is an important part of getting your finances in order. If you're older or have grown children, you may need less life insurance or none at all now that you're widowed. But if you have children or other people who are financially dependent on you (e.g., elderly parents), you may need more life insurance than you think.

Your coverage needs

Though your family has changed, the need to protect your children's future remains. Life insurance can help ensure that your children will be provided for if something happens to you. The amount of life insurance you need depends on the number and ages of your children, as well as your income, debt, and assets. A good rule of thumb is to buy coverage that equals six to eight times your annual salary. You will want to make sure that you have enough insurance to cover your children's day-to-day living expenses and the cost of their college education. Ask your insurance agent or a financial planner to help you evaluate your needs and find a life insurance policy that's right for you.

Beneficiary Designations

Whether you have children or not, you should also review and update the beneficiary designations on any life insurance policies you own. Your insurance agent can help you with the necessary paperwork. If you don't have an agent, you can always call your insurance company and ask to speak to someone in the policyholder service department for more information. But don't name a minor child. Insurers generally won't make settlements directly to minors, and the probate court handling your estate may require that a trust be set up, and a guardian appointed, to manage the proceeds.

Tips on buying life insurance

• You may have the opportunity to purchase group life insurance through your employer, trade groups, or professional associations
• If you're concerned about the cost of premiums, consider low-cost term life insurance
• Find an experienced insurance agent or financial planner to help you evaluate your situation and the products available
• Check insurance company ratings, such as A.M. Best and Standard & Poor's, for an insurance company's financial stability
• Be sure to shop around for the best rates
• Periodically review your life insurance needs to make sure that you have the proper amount of coverage