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11 Life Changes That Should Trigger a Review of Your Life Insurance

“Life changes.” It’s a two-word sentence that is excruciatingly cliché and unspecific, yet profoundly true.

Milestones and crises are similar in that they have an impact on every aspect of your life, from emotional to financial.

If you’re experiencing a notable life event of any size or sort, you should consider reviewing your life insurance policy to ensure that it aligns with your current situation.

Here are 11 life changes that will likely affect your life insurance:

Quick Article Guide

1. Retirement
2. Accepting a Pension
3. Buying a Home
4. Having a Child
5. Salary Increase
6. Getting a New Job
7. Starting a Business
8. Funding a Family Trust
9. Marriage 
10. Divorce
11. An Expiring Term Life Policy
12. Get A Quote

1. Retirement

Many people become blindly accepting of group life insurance provided through their employer. All is well while you’re working, but when it comes time to retire, understand that you will no longer have access to your employer’s coverage. The stakes will also be higher because you want to ensure that if you die, your spouse and family will have adequate financial support, whether from your retirement savings, a life insurance death benefit, or a combination of the two.

2. Accepting a Pension

Speaking of retirement, if you’re fortunate enough to have a pension plan, you will be faced with the decision of whether to accept the full pension or a reduced spousal benefit. Do not take the spousal benefit before speaking with a life insurance agent. Using a strategy called pension maximization, you might be able to supplement your pension with life insurance and accept the full payout while still providing financial protection for your spouse and family. Learn more about pension maximization by clicking here.

3. Buying a Home

When you purchase a house for the first time, it’s the largest financial commitment you have ever made. Regardless of your and your spouse’s respective incomes, you’ll need life insurance so that if one of you were to die, the other would have the necessary replacement income to pay the mortgage, keep the home, and maintain a similar lifestyle. Likewise, you might later upgrade to a new home that is perhaps bigger or in a more desirable neighborhood. Anytime you are bringing a new mortgage into the picture, it should be a trigger to reassess your life insurance coverage.

4. Having a Child

Whether you’re having your first child or your third, your life insurance is critical to safeguarding their financial future. If you die and your spouse is left with no money, how will they provide for the kids? It’s important to carry coverage lasting at least through your children’s high school and college years, until they are able to fully support themselves.

5. A Salary Increase

Most experts suggest carrying life insurance with a death benefit between 5 and 10 times your income so that if you die, your family has your income replaced quickly. With that recommendation, any significant increase in salary should be followed by a call with your life insurance agent to discuss whether you need to up your coverage.

6. Getting a New Job

When you get a new job, there are two reasons to review your life insurance: 1) Your employer-sponsored coverage will change, and 2) Your salary will change. Note that if your new employer offers a less desirable life insurance plan than that of your previous employer, you may wish to supplement with buying separate coverage.

7. Starting a Business

Life insurance is essential for business owners. For those who already have a personal life insurance policy, your knee-jerk reaction will be to dismiss this whole conversation. That would be a huge mistake, because a business protection policy is different from a personal policy. Personal life insurance provides a death benefit to your family or heirs, not your fellow business partners or your business in general. So, you’ll want to secure different types of business coverage in addition to your personal coverage. Read more on life insurance for your business here.

8. Funding a Family Trust

When establishing a family trust or will, life insurance will go hand in hand with your estate planning. The process can be extremely complex and intimidating, so we’ve created a complete guide on life insurance for estate planning.

9. Marriage

It’s well-known that marriage affects your finances in a number of ways, one of which is life insurance. When you get married, you and your spouse should both carry life insurance. You don’t need to discuss it on your honeymoon, but at some point early on in your marriage, take the time to ensure that you are each protected from financial hardship if the other dies.

10. Divorce

A divorce will also affect your life insurance, particularly if your ex-spouse is the main provider for your children. Will there be money to support your kids if your ex-spouse dies? Through the painful process of divorce, life insurance should be high on the list of priorities to settle.

11. An Expiring Term Life Policy

Lastly, if you have term life insurance that is set to expire in the coming months, it should go without saying that it’s time to review your policy and decide whether you are going to renew, convert, or buy a new policy altogether.

Speak with an Independent Agent

Have you recently gone through one of these life events? JRC can help you evaluate your current life insurance and, if necessary, shop dozens of providers for the right coverage to match your changing needs.

Click here to see what our many happy clients are saying about us, or give us a call for your personalized quote (855)-247-9555.

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