Life Changes And Life Insurance: When To Consider Increasing Your Life Insurance Policy
Having a life insurance policy helps to pay for more than your final burial expenses. It helps your family to live the life that they have become accustomed to in the event that you pass away. However, many people do not realize that they should be adjusting the amount of their life insurance policies as they go through life changes. Here are three life changes you may experience in your life and why you need to increase your life insurance policy because of these changes.
The Birth of a Child
If you or your spouse have a child, you should increase the policy amount for your life insurance policy. Children are expensive to raise and if you were to die early, your spouse may struggle to provide for your child on their own. Increasing the size of your family from one child to two or three may also warrant a change in your policy. Always ensure that your policy is high enough to provide for your spouse and any children you have to ensure their lives are not financially disrupted due to death.
Buying a Home
Buying a home is a large purchase. And at the time, the last thing you may be thinking of doing is increasing your life insurance and paying a higher premium amount. However, if you were to pass away, your family may not be able to afford to make the house payments without your income. This may force them to move out of the home that you bought as a family and into a smaller home or into a home in a less desirable neighborhood. When deciding how much life insurance to buy, always ensure that the policy amount will pay the amount of your outstanding debt, including credit card bills, car payments and house payments.
Starting a New Job
If you or your spouse are starting a new job, you may want to look at increasing your life insurance policy. There are two reasons for this. First, many employers offer life insurance policies to their employees. However, you typically have to pass a probation period or work at the job for a specified period of time to qualify. If you or your spouse had life insurance through your old employer that supplemented your current life insurance policy, you may need to increase your current personal policy to make up for this decrease. Secondly, if your income has increased due to a new job, your quality of life may also change. Increasing your policy amount ensures that your spouse and any children will continue to live this way should you pass unexpectedly. Most experts recommend multiplying your income by 10 to determine a base level of life insurance you will need, and a new job may cause this number to increase.
As you go through life, you should make changes to your life insurance policy. This ensures you have enough life insurance to provide for your family, regardless of what has happened in your life from the date you first purchased a policy to the date you pass away. To learn more about life insurance, contact an agency like The Blondin Agency Inc - Nationwide Insurance.
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