You may want to up your coverage if any of these apply to you.
- Your life insurance policy should cover your loved ones fully in the event of your passing.
- It’s not unusual for coverage needs to change over time.
Putting a life insurance policy into place is one of the best things you can do to protect your loved ones. Having life insurance could make it so your beneficiaries are able to stay afloat financially without having to uproot their lives upon your passing.
But the amount of life insurance you start out with isn’t necessarily the amount you should stick with. There may come a point when it becomes necessary to increase your coverage. Here are three such situations.
1. Your expenses have gone up
Perhaps when you first got life insurance, you were living in a home with a $200,000 mortgage and generally spent $5,000 a month on living costs. But if your lifestyle has since changed, and you’ve taken on higher expenses, you may need to up your life insurance coverage to account for that.
Let’s say that in the past year, you decided to upsize your home, leaving you with a $400,000 mortgage instead of your previous $200,000 home loan. Let’s also say your living costs now come to $7,500 a month instead of $5,000. To be clear, if your income has risen and can support these changes, there’s nothing wrong with taking on larger expenses and increasing your spending. But in that case, you’ll probably need to update your life insurance policy to reflect those new numbers.
2. You’ve grown your family
You may have put a life insurance policy in place when you had your first child. But if you’ve since had two or three more children, you may want to increase your coverage, as you now have a larger number of beneficiaries to cover. Also, more children generally means higher expenses, so you’ll want to leave your surviving spouse with a high enough amount of coverage to take care of all of your children in your absence.
3. You’ve started to care for aging parents
Some people start to require care or help with everyday living as they age. If you’ve recently assumed the role of caregiver, even on a part-time basis, for older parents, you should consider increasing your life insurance coverage so there’s money available in the event of your passing. In that situation, paid care for your parents could become necessary, so it would make sense for your policy to allow for that.
It’s a big misconception that Medicare covers the cost of things like home health aides or assisted living facilities for seniors. Medicare’s coverage is generally limited to medical issues only. Seniors who need a hand with things like running errands, cooking, and even getting dressed often have to bear that full cost out of pocket, so that’s something to keep in mind when you assess your life insurance needs.
It’s not unusual to apply for life insurance earlier in life and update your policy as circumstances change. In fact, it’s a good idea to review your coverage every so often and make sure it’s adequate. Spending a little bit more on added coverage could mean giving your loved ones complete financial protection. And upping your life insurance could also give you the much-needed peace of mind you deserve.
Life Insurance Protection for You and Your Family
While many varieties of insurance coverage are designed to help protect a person’s family and assets, life insurance is a vital type of protection. The right life insurance can help protect the people that depend on you the most if you should pass away. Choosing the right life insurance policy is critical to ensure your loved ones are protected properly. We have sorted through the various options to provide you with our choices for the best life insurance policies available today.