By Farm Bureau Financial Services on February 1, 2023
5 Huge Life Events and How They Affect Your Life Insurance
Major life events will take place as you age, inspiring the question, “How often should I review my life insurance policy?” The good news is, no matter what turn life takes, you can always adjust life insurance coverage to fit your new reality.
Landing a new job
Congrats on the new job — hopefully the position comes with a higher salary and better benefits! If your new job helps you afford an upgrade to your current lifestyle because of your higher earnings, you may want to reevaluate your coverage. Also, if you held a life insurance policy through your previous employer, you’ll now need to get coverage either through your new job or an insurance provider. Regardless, if you have loved ones who depend on your income, it’s important to ensure they’re protected if something should happen to you.
Changing marital status
Your life insurance is an asset and a way to financially protect the people you love. Whether you recently got married or you’re going through a divorce, this is a big life change and prompts adjustments to your life insurance policy. Review your beneficiaries and confirm your information is up to date and aligns with your current wishes. For example, in the event of a divorce, you may need to change your beneficiaries to make sure your children have direct access to your benefits.
Gaining or paying off a mortgage
When purchasing a home, you need homeowners insurance. But having an additional life insurance policy can help guarantee your loved ones are able to maintain the mortgage and keep your home if something were to happen to you — life insurance coverage allows you to provide financially for your loved ones after you’re gone.
However, the life insurance policy you opened 10 years ago may not cover your new home’s bigger price tag, and you might need to increase your life insurance policy. On the reverse side, if you’ve recently paid off a mortgage, then your obligations will be lower compared to when you purchased your policy. In this instance, you may not need the same level of coverage today and can reduce it.
Coverage needs can shift over time. From paying for daycare to saving for their college education, the cost of providing for kids varies at different life stages and may require more coverage as they get older. If your child is financially independent, you may be able to reduce your coverage.
You’ve been working your entire life to afford retirement. Do you still need your life insurance if you’re no longer working? There are valid reasons you may want to keep your coverage, even if you aren’t clocking in every day. Whether you’re fully retired, nearing retirement or still have many professional years ahead of you, having a life insurance policy in place makes sense if you have debt or family members who depend on you financially.