Life insurance needs typically change as your circumstances evolve, so it’s a good idea to revisit your needs every two to three years, or whenever you experience certain life changes.
Here are seven life events that should trigger re-evaluation of your life insurance needs.
1. Starting your career
Even if you’re single and don’t have children, you should still think about life insurance. Someday you might want to buy a home, raise a family or start a business. Buying life insurance now – when you’re young and rates may be lower – will help build a solid financial foundation for the future. It also can help financially protect those who co-signed for your debts, such as student loans.
2. Getting married
It’s a time of bliss but also a time to set up financial protection for the one you love. If something happens to either you or your spouse, you don’t want the other burdened with debts or bills they cannot keep up with. A life insurance policy can help provide that financial stability – and each of you should have a policy.
3. Buying a home
Getting a mortgage means a home of your own – it also means a big financial obligation. But, what if you or your partner passes away? Aside from feelings of loss and grief, there may be the threat of losing your home if your partner can’t manage the mortgage payments. The benefits from a life insurance policy can help lessen the burden or possibly cover this entire expense.
4. Welcoming a child
When you’re preparing to welcome a child into your life you’ll want to adjust accordingly so that no matter the circumstances, your child is provided for. If you or your partner were to pass away, life insurance could help pay for childcare, typical childhood expenses and higher education. How much coverage should you have? Enough to cover each child through age 17, which averages around $233,000.1
1 The Cost of Raising a Child, U.S. Department of Agriculture, 2017.
5. Raising a family
As your family starts to grow in age and size, you’ll quickly realize there are many financial considerations to account for based on the number of children you have. Like expenses related to daycare, after school activities and saving for college tuition. Now is a perfect time to review your life insurance and consider additional coverage to help ensure your loved ones can maintain their standard of living should you pass.
6. Empty nesting
Even though your children are out on their own, you may have a need for additional life insurance, to replace an expiring policy that covers a first or second mortgage. Or perhaps you want to support people who depend on you financially, like your spouse, aging parents or adult children.1 In short, life insurance is much more than coverage for your children. It’s a good idea to review your coverage needs once they’re out of the house.
1 Do ‘Empty Nesters’ Need Life Insurance? Insurance Information Institute, 2014.
There are several reasons to retain and consider additional life insurance through your retirement years: Do you have a loan (business or home) you’re still paying off – and don’t want to leave your family the burden of having to pay it? Do you have a child with a disability in need of continuing care? Do your children or spouse rely on you financially?
Do you know how much insurance you need for your current stage of life? Use Amica Life’s needs calculator to find out.
ALIC43319 (exp. 3/20)