Some people think of life insurance as a “once and done” checklist item in life. They imagine that once you’ve dealt with the delicate conversations about life insurance and made your decisions that you’ll never have to worry about it again.
While that may hold true in some cases, more often than not it doesn’t work like that. As you encounter changes in your life, you’ll almost certainly need to reconsider your current level of life insurance coverage. But what kind of factors would spur you to modify your life insurance coverage? We’ve collected a few of the most common reasons.
Any time your family grows, you’ll likely want to reexamine your life insurance coverage to make sure you have enough. The most common reason you may expand coverage, or possibly get it in the first place, is when you get married or have a child. Bringing someone else into your life makes a good life insurance policy an absolute must—you wouldn’t want to leave them with a financial burden should the unthinkable happen.
There are other ways your family can grow and you should consider expanding your coverage. For example, you could have more children, or an aging parent could move into your household. These extra dependents are a very good reason to look at your current coverage and adjust it if you think it’s falling short.
Any time your income levels change you’ll want to see if you have enough life insurance coverage. If you have enjoyed a pay increase over the years, it’s a great time to look back at your life insurance policy—you may have gotten less coverage when you were making less and use your higher pay to increase your coverage to better manage your future.
There are other adjustments you may want to take into consider: maybe you partner has stopped working to spend time with your children or focus on other pursuits. If that’s the case, you would be smart to increase your coverage to make sure you are meeting the necessary financial expectations.
There are a wide range of other life events or changes that can inspire you to get more life insurance coverage. You might have a family member who has been diagnosed with an illness or requires long-term care, requiring you to make sure your policy can cover these other expenses. You could find that your standard work policy is no longer enough and need to make a change. The key is to be aware of what could impact your life insurance beneficiaries and be prepared to make increases if the circumstances call for it.