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| 10 Reasons You May Need More Term Life Insurance |
Do you need more term life insurance coverage? In many cases, there’s a major gap between the amount of life insurance coverage you have and the amount of term life insurance you need.
As you reach different stages in your life, you need more term life insurance. If you need more term life insurance and fail to update your policy as your life changes, you could find yourself grossly underinsured. If you're unsure whether or not you need a term life insurance policy--or more coverage if you already have term life insurance--this article can help.
Need More Term Life Insurance?
There are several reasons you may need term life insurance. And, if you already have coverage, you may need even more term life insurance as you get older. Here are 10 reasons you may need more term life insurance.
Reason #1: You own a home
If you're planning on purchasing a home or refinancing your mortgage, you may need term life insurance. If you're unsure about purchasing more term life insurance, ask yourself this question: Could your family make mortgage payments without you?
Reason #2: You're in debt
Your term life insurance may be enough to cover your mortgage, but what about other debts? In the event of your demise, you need term life insurance so your loved ones can pay personal loans, credit card bills, student loans and other expenses. You don’t want to leave debts behind for your loved ones.
Reason #3: Marriage
If you're sharing your life with a spouse, chances are you're sharing the financial burden, too. Term life insurance can serve as income replacement to help your loved ones pay the bills and maintain the same standard of living. Many couples find it relatively easy to pay day-to-day expenses as part of a two-income household, but many partners would find themselves in a financial pinch if they were forced to survive on their income alone. In this case, you probably need more term life insurance.
Reason #4: A new baby
Welcoming a baby into the world is a wonderful time for parents, but it can place a tremendous strain on a family's finances. As any parent knows, raising a child can cost a fortune. If one income is lost, the family will need financial support so the surviving spouse can support the family. And when a new babies arrive, most families need to adjust their term life insurance coverage significantly.
Reason #5: You buy a bigger home
A bigger home usually means a more expensive mortgage. Make sure you increase your term life insurance coverage when you buy a larger home.
Reason #6: A promotion
Congratulations on the big promotion! Now that you're making the big bucks, remember to increase your life insurance coverage appropriately. Maybe you're driving a more expensive car, living in a nicer area or sending your kids to the best private school in town. Whatever the case, consider increasing your term life insurance coverage to help your family sustain a comfortable lifestyle in the event of a tragedy.
Reason #7: A growing family
Whether it's having another baby, inviting family members to live with you or adopting children, as you add dependents it's crucial that you step up your level of life insurance protection to fit your family's needs. As your family grows and there are more mouths to feed, you definitely need more term life insurance to keep them financially secure should the unthinkable happen.
Reason #8: A new job
Even if your old employer offered death benefits, you may be out of luck if you change jobs. Your new employer may offer benefits, but how much? Likely not enough to cover your family's financial needs for even a short period of time. Starting a new job is a golden opportunity to reevaluate your term life insurance needs and invest in a policy that won't vanish whenever you change jobs.
Reason #9: You become widowed or divorced
If you're a widow or divorcee, you'll likely need to reevaluate your life insurance coverage. You may have more financial obligation as a single parent (for example, paying for accommodations and expenses on one salary instead of two), or you may have lost life insurance coverage you previously had through your spouse. If you're a single adult without children, you may be able to save money by decreasing term life insurance coverage. Whatever the case, make certain you update your coverage if you're divorced or widowed.
Reason #10: Retirement
Now that you're retired, you must take some time to assess your life insurance needs. Even though your children may be grown and on their own, and your spouse may be able to survive on their retirement savings, there are many circumstances to keep in mind. If you fall ill before you pass away, you and your spouse will likely incur steep healthcare expenses. There are also funeral costs to consider.