As we go through life, there are several joyous milestones that we all look forward to. Graduating high school, then college. Meeting the loves of our lives. Getting married. Buying our first home. Having children. Retiring. Each of these events are reasons to celebrate. Many are also ideal moments in time to take a look at your life insurance and reassess whether your insurance policy still matches your life. We will look at four of the biggest life events and the effects it can have on your term life insurance needs.
Getting married– Congratulations! Marriage is a big step, and we are happy to hear that your significant other has decided that they would like to spend the rest of their life with you. This is the first time you probably would have a reason to take a look at your life insurance and see if the coverage and term still matches where you are in your life. If you do not already have term life insurance, now is the time to get it. Your significant other relies, to an extent, on the income you bring to the marriage, and you are no longer a single person in the world. If you were to pass, would your significant other be able to afford the life the two of you had built as well (not to mention the costs of your burial)? Often, marriage can be time to increase the amount of coverage you have to make sure your loved one is well off should the worst happen.
Buying your first home– You and your spouse have been together for several years now, and you are ready to buy your first house together. This is an exciting time in your life, so enjoy it. You are probably going to start with a smaller house, just enough room for the two of you and maybe a baby in the near future? While a smaller house is less expensive, unless you are independently wealthy, you will probably need to take out a mortgage on the house. Most mortgage lenders will require a life insurance policy as collateral against the loan to ensure that if something were to happen, the money they have invested into your house can be recouped.
If you have gone this long without getting life insurance, chances are that you will have to purchase a policy. Even if it is not required, taking out a term life insurance policy is a good idea. It can cover the cost and duration of your mortgage to ensure that your loved ones never have to leave the family home. If you already have life insurance, now is an excellent time to re-examine your policy. You may want to increase the coverage or extend the term to cover your mortgage.
Like any major purchase, you should compare your options when purchasing life insurance. Different policies will have different pros and cons, and will be influenced by different risk factors. By using an independent term life insurance agency, like SelectQuote, you can compare different life insurance companies and policies to find the best policy to fit your budget and lifestyle. In the next post we will discuss two more major life events that can have an effect on your term life insurance policy!