• Buy enough insurance. The older you are, the more expensive life insurance is. And you may need more coverage than you expect, says Jane Nowak of Wealth & Pension Services Group outside Atlanta. Her rough guideline for how much you need: Start with five years of your current living expenses—enough to replace your income for a while, though not forever. Then add up all the expenses you’d like to cover for your children after that, from private school and college to weddings.
Employees can often buy some insurance through their jobs. Qualification is usually automatic, but healthy employees may find better prices elsewhere, planners say. Another advantage of life insurance outside work is that it can follow you from job to job. Nowak suggests locking in a 30-year term life insurance policy.
• Keep updating your paperwork. The will and the insurance policies that you set up as a 40-year-old mother of a baby aren’t going to work when you’re the 58-year-old mother of three teenagers. Planners notice their clients have a scary tendency not to update paperwork.
For example, the beneficiaries on insurance policies and investment accounts need to be kept current. One of Nowak’s clients forgot to add a second son to their life insurance policy. They didn’t notice until he was 15. If his parents had died in the meantime, his older brother would have gotten the entire death benefit. Guardians also need updating; they get older or die. Wills may need to be rewritten if you move to a new state.