If you are uncertain if you have enough life insurance, it is time to review your existing policy or, for some people, put a new policy in place. Life insurance is dynamic and needs to change with time. As you hit significant milestones, your insurance must match the changes. Here are some signs that you are underinsured.
You Never Calculated How Much You Need
While you may not have realized it then, you may have purchased your existing policy off face value. Maybe the death benefit seemed adequate, but did you ever calculate how much coverage you need in real-world numbers? If not, here’s a guide on how to count it up. First, list the following expenses:
- Your debts
- Your mortgage
- Several years of living expenses for your surviving family
- College costs for children
- Other major expenses, like a wedding for a child
- Medical bills
- Cost of funeral and other death expenses
This calculation will allow your surviving family to continue living comfortably after your passing. During such an emotional transition, added financial stress can weigh heavily on your loved ones.
Your Annual Salary Has Increased
If you purchased insurance in your younger years when salaries were lower, you are likely now making many times what you did then. This is a clear sign you’ve outgrown your last policy. If your household expenses have expanded and reflect your higher income, your policy should be updated to match the current situation.
Your Family Has Grown
Adopting a child or welcoming a newborn to the family is one of life’s most rewarding events. It is also a sign your life insurance policy must be updated. You’ll want to ensure that this new family member is correctly named as a beneficiary to help secure their future well-being should a parent or parents pass away.
You Bought a New Home
Purchasing a new home is a thrilling milestone. With it comes all the joys, risks, and costs of owning a home. Ensure your existing policy covers paying off your mortgage; if not, it’s time for an update.
Your Spouse is Uninsured
If you are the only one employed in your household, you may need life insurance for your partner who stays home. If your partner provides essential contributions, like childcare, cleaning, cooking, gardening, maintenance, and other household functions, their absence could leave you needing thousands of dollars to cover the cost of these actions, with nowhere to turn. A life insurance policy will provide the means to care for dependents in a worst-case scenario.
Are You Underinsured? We Can Help.
If you’re in one of the above categories, don’t wait to ensure you have enough life insurance to support your family when they need it most. Our life insurance agents are available to help you make a decision that suits your budget and your family. Call today to schedule a consultation to ensure you get the right coverage for your needs.