In our previous post we discussed two major life events in one’s life that can effect term life insurance needs. For today’s post we will address two life more events that can have a large effect on your term life insurance needs.
Having a child– Having a child is a blessing that is always celebrated. You and your significant other have been preparing for your little one to arrive for months, or years, and now its time to take your “new born” home. You have set up the baby room. You’ve bought the diapers and read the books…. but did you increase the amount of term life insurance you have?
Having a child is not inexpensive. In fact, the US Department of Agriculture estimates that the cost to raise a child over the course of his or her life is around $235,000. Not to mention the time and energy required to raise a child. Increasing your life insurance after you have a child is a smart decision because it will insure that your significant other will be able to continue raising your children in the lifestyle they are accustomed to as they adjust to life without you. Term life insurance can also be used to set up a college fund for your children if you were to pass, or be left as inheritance for them when they are older. No matter how you decide the term life insurance policy “pay out” should be used, making sure your significant other and your children are protected financially is the primary goal.
Retirement– Congratulations on making it to retirement! You have worked most of your life to get to this point. Your children have finished college, and you and your significant other have earned some relaxation time. By this point in your life, your home should be paid off and you should no longer be supporting your children, so now might be a good time to consider reducing the amount of coverage and the duration on your term life insurance policy. Consider how much money would be needed to cover the cost of your burial, plus how much money you would like to leave behind for your significant other and/or your children. Since you are probably in your sixties, you may not need a 30-year term. Consider how long of a “term” you think you may need.
So, in summary, those were just four major life events that should have you look at your life insurance policy, but they are by no means all the events that can occur. New jobs, for example, are another event that may cause you to reassess your needs. It is important to re-examine your insurance needs at regular intervals throughout your life to make sure your policy still matches your commitments.
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.