Insurance coverage

3 times to increase your life insurance coverage

If your family is growing, you’ll want to increase your life insurance coverage. / Credit: Getty Images

Life insurance provides financial security by paying out a sum of money to certain beneficiaries after the death of the policyholder. Millions of Americans currently have such policies in place to protect themselves should something go wrong.

Sometimes it’s through an employer, sometimes it’s directly through a supplier, and other times it’s a combination of the two. And when these fail, they rely on supplementary life insurance to fill in the gaps.

While many people might agree that a life insurance policy is a good investment, it’s important to review your coverage regularly, especially when you’re going through major life changes. If you think it might be time to reevaluate your plan or get a new one, you can start by getting a quote today.

Those still thinking about life insurance policies and plans can read on to find out if now is the time to take action.

When should you increase your life insurance?

While this personal financial protection is important, the issue of how much life insurance an insured should buy varied. Factors such as age, health, income, and employment status all influence these numbers.

Whether you have a lot or a little, there are reliable guidelines for when you should increase the life insurance you have. It is generally accepted that certain life events should trigger an increase in coverage.

Here are three scenarios in which you should consider increasing your life insurance coverage.

Your work policy is not enoughYou earn more moneyYou have passed a stage of traditional lifeYour work policy is not enough

Many workers have life insurance through their employer and leave it there. But what if that’s not enough? Think about the expenses you and your family have currently paid for through your salary. Will the insurance provided cover everyone in the event of death? And even if it does, how long will it last?

Do a realistic review of the coverage offered by your employer. If it’s just basic life insurance that will fill the void for a year – and your death has left years (or even decades) of lost income – you should probably increase the coverage you have. It can’t hurt (assuming you can qualify for reasonable premiums).

If you think this scenario applies to you, talk to a supplier and get a price estimate.

You earn more money

While a raise in your salary is always helpful, it may be time to increase your coverage accordingly. If the coverage you had before 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 has resulted in adjustments to your standard of living (think: new, higher bills for things like cars, houses, etc.), you’ll need protection to make sure those- these can continue to be paid. in your absence.

You have passed a stage of traditional life

Did you just get married, have a child or buy a house? All three are reasons to increase your life insurance coverage. As your life changes and the bills and responsibilities grow with it, you will want to make sure that you have life insurance in a commensurate amount.

For example, if you were single, life insurance in the amount of an individual income should suffice. But if you’re married now, you’ll want protection for two. Increase it again for each child you have.

If you’ve recently purchased a home, you’ll have years, if not decades, until it’s paid off. Increase your life insurance coverage to help pay the balance should your death result in a high mortgage payment.

While these are some of the most important reasons for increasing your life insurance coverage, that doesn’t mean they’re the only ones. Make an honest assessment of your life, family, home, and finances.

If you can afford to pay for life insurance protection to cover these expenses, it’s probably worth increasing your coverage. Get started today by speaking with a supplier.