Life Insurance Needs Calculator – Consider the Blackout Period

Life Insurance

You may have been considering getting life insurance to provide for your family’s financial security. You may have seen various needs calculators to help you determine how much life insurance you need. Many needs calculators ask you how many years of income replacement you want to leave for your family to maintain the lifestyle they have been accustomed to.

They may not refer to a phrase called the Blackout Period when considering the years of income replacement needed; however, I would like to address it. The Blackout Period is the period of time when a surviving spouse will be unable to receive survivor benefits from Social Security if eligible for benefits. Currently a widow or widower with dependent children will receive survivor benefits until the youngest child reaches age 16 unless the child is disabled. The child will be eligible to receive benefits until they are age 18 providing they are attending school. The Blackout Period would extend until the widow or widower reaches age 60 unless disabled.

Let’s consider an example in which a spouse becomes a widow/widower at age 34 with 2 children ages 12 and 10. The surviving spouse would only receive Social Security Survivor Benefits for a maximum of 6 yrs. until the youngest child reaches age 16. That means the surviving spouse will be ineligible for any Social Security Benefits until age 60 unless disabled resulting in a Blackout Period of 20 years. The surviving spouse will not receive any government benefits from age 40 to age 60. A Blackout Period for any period of time can be devastating to a surviving spouse. Consider this, how long can you go without a paycheck? Imagine not receiving an income to live on other than your savings and investments for 20 yrs.? A solution to this problem is life insurance.

What will the surviving spouse do if there are inadequate life insurance benefits, savings, or investments to provide financial support to live on? The surviving spouse may not be able to maintain the family home and may need to re-enter the work force after being out for a number of years raising a family.

About the author: Ken Buccico holds a LUTC designation and has been in the life insurance business for 39 years. His wealth of experience empowers clients to make best possible decision regarding a life insurance policy. To explore the best  life insurance option, contact Ken at 1-800-651-1953 or KBuccico@Pivot.com.