An individual's life insurance needs change significantly as they go through life. While many people have no need for life insurance at some points, there are several different types of life event that can suddenly create or drastically increase an individual's need for life insurance.
It's important to make important changes to your life insurance coverage right away to keep your loved ones protected. The following are six major events you may experience at some point in life that will require you to reconsider your needs for life insurance:
1. Getting married
Purchasing life insurance is important for married individuals. This is especially true if one spouse is financially dependent on the other. The spouse who is the breadwinner needs to purchase life insurance to help support a surviving spouse in the event of an early death.
Two spouses who make roughly the same amount of money may want to purchase life insurance to help one another with living expenses in the event of a death. Married couples often afford their place of residence by pooling their income together, so one spouse alone may not be able to afford all of the bills.
2. Having a family
One of the most important life events that make it so that life insurance is a necessity is having a child. If you have no life insurance, your child will not be supported by your income if something happens to you.
The more children you have, the more life insurance you need because the more expensive it becomes to support your family. These days, you'll want to also plan for the college education of your child, and this is a huge expense but an important one for getting your child on a better career path in life.
3. Purchasing a property
Buying a home is a huge financial commitment that you'll need to be sticking with for years to come.
Life insurance is important for homeowners because it provides funds that can be used for mortgage bills and other household debts. This money will help the policy holder's spouse or significant other afford to continue living in the home if the policyholder should die.
4. Getting divorced
Those who get divorced might want to change their life insurance policies. When you divorce, you'll typically be separating yourself financially from your ex-spouse. You'll therefore probably want to remove the ex-spouse as your life insurance beneficiary.
5. Experiencing lifestyle or employment changes
If you start to make significantly more money due to an employment change and this leads to a more expensive lifestyle for your family, you will need to increase your life insurance coverage if your family is to maintain that lifestyle if something happens to you.
6. Retiring or having a spouse retire
Insurance coverage is important during retirement in certain situations. For example, you may need life insurance if a retired spouse is depending on you to continue working for healthcare insurance coverage before your spouse is eligible for Medicare.
It's important to plan carefully for retirement and purchase insurance for your spouse or children if you have pension or IRA payments that will cease upon your death. To learn more, contact an insurance agency like USAlliance.