None of us likes to think about life insurance, but unfortunately it is something that we do need to consider. After all, none of us will love forever. And when we want to know that when we’re gone our loved ones will be taken care of.
But how do you know if you need to make changes to your life insurance policy or if you are under-insured?
Here are 4 times when you should reevaluate your life insurance and make any necessary adjustments.
You got married. When you’re single with no dependents you really don’t need much life insurance, if any at all. But when you’re married you have to think of your spouse too, particularly if you are the primary breadwinner. You should have enough life insurance to allow your spouse to pay off any debt and cover the bills when you’re gone.
You bought a home. As soon as you sign the mortgage paperwork on your dream home you’re instantly in a whole lot of debt. It would be very difficult to cover the mortgage on a single income, so you should have at least enough life insurance to make sure your spouse doesn’t lose the house.
You have kids. Children change everything. Raising a child to the age of 18 costs a small fortune and doing it on a single income is not easy. You’ll need to boost your life insurance to ensure they are properly taken care of. The younger they are the more insurance you’ll need since the money will need to last longer. And don’t forget to factor in the skyrocketing costs of college.
You change jobs. The insurance policy you had when you were earning $25,000 as an entry-level employee won’t last very long if you now have the bills of an executive in a corner office. Generally speaking, the more income you have the more you’ll need to replace.