Life insurance provides a financial safety net with some money to choose fromAfter the death of the policyholder. Millions of Americans currently have such policies to protect themselves if something goes wrong.
Sometimes it’s through an employer, sometimes it’s directly through a provider, and other times it’s a combination of both. And when they fall short they dependto fill in the blanks.
While many people can agree a life insurance policy is a good investment, it’s important to regularly review your coverage — especially when you undergo significant changes in your life. If you believe it may be time to reevaluate your plan or get a new plan, you can get started by getting a quote today.
When should you increase your life insurance?
Whether you have a lot or a little, there are reliable guidelines for when to increase the life insurance you have. It is generally agreed that certain life events will cause an interruption of coverage.
Here are three situations you should consider increasing your life insurance coverage.
Your work ethic isn’t enough
Many workers have life insurance coverage through their employer and leave it there. But what if that’s not enough? Think about the expenses you and your family currently pay for with your salary. Will the insurance cover everyone in the event of your death? And even then, how long will it last?
Do a realistic review of the coverage your employer provides. If it’s only basic life insurance that will cover a gap of one year — and you’re left with years (if not decades) of lost earnings — you should probably increase your coverage.
If you think this scenario applies to you, get a free price estimate to see exactly how much you qualify for.
You’re making more money
While increasing your paycheck always helps it may be time to increase your coverage accordingly. If the coverage you previously had was limited to what you could afford — and now you can afford more — you should probably consider increasing the amount you have.
Also, if the new salary causes an adjustment to your standard of living (think: new, more expensive bills for things like a car, house, etc.) you’ll need protection to ensure these can continue to be paid for. in your absence
You’ve hit a traditional life milestone
Did you recently get married, have a child or buy a house? All three are reasons to increase your life insurance coverage. As your life changes and bills and responsibilities mount, you’ll want to make sure you have life insurance for a consistent amount.
For example, if you are single, life insurance in the amount of a single earner should be sufficient. But if you are married now, you will want the protection of both. Increase it again for each child you have.
If you recently bought a home, you’ll have years – if not decades – until it’s paid off. Increase your life insurance coverage to help pay off the balance, if your death leaves a hefty mortgage payment in the account. You can now get a free price quote for a policy.
Another time to increase your life insurance
While the above scenarios are reliable as to when to increase your life insurance coverage, they are not the only ones you should consider doing so. Here are four other times it might make sense to upgrade your life insurance:
- You have long-term debt. Buying a home isn’t the only long-term loan that may require increased life insurance coverage. If you have student loan debt, for example, it may make sense to have life insurance coverage in an amount that can cover what you owe. This will also apply to other conventional loans. If they’re significant, have a long shelf life, and could pile up financial headaches for your beneficiaries, it’s probably worth increasing your life insurance coverage to pay what’s outstanding.
- Your partner is no longer working. If your spouse or partner is no longer employed, regardless of the reason, you should think about bumping your life insurance coverage. Two salaries – and two insurance policies – are better than one If you reduce or eliminate one of them, you’ll want to increase your life insurance to ensure you have a consistent level of protection.
- You are taking on additional financial responsibilities. If you’re financially dependent on new expenses (think college expenses, new car loans, etc.) you’ll want to increase your coverage to cover those expenses in the event of your death.
- Your long-term plans have changed. Are you caring for (and financially supporting) someone you don’t plan to help? It may be wise to increase your coverage amount to cover the gap you may have left. Talk to a life insurance expert who can help you determine if it makes sense for you.
While these factors are some of the more important to increasing your life insurance protection, that doesn’t mean they’re the only ones. Take an honest assessment of your life, your family, your home and your finances. If you can afford life insurance to cover these costs, it’s probably worth increasing your coverage. Get started with a free price quote today!