With life insurance, you will not only need to determine how much is the right cover but also when it is time to increase the amount. The main reason you will need to you increase your amount of life cover is because your circumstances have changed. When this happens you will need to review your life insurance policy and make the necessary adjustments.
Here are 4 signs you should increase your life insurance cover, to make sure that your loved ones will be provided for in the event of death.
Your Family Has Grown
One of the main times you will need to increase your life insurance is when you have a child. With a new child comes a new sense of responsibility, new expenses and even new worries. You will need to think about the long-term future of your new addition and make sure that you will be able to provide for your child financially until they are an adult if you were to pass away prematurely. This means you will need to increase your life insurance policy and ensure your policy is adequate enough to provide for your child.
You Have Received a Significant Increase
If your salary has had a significant increase due to a promotion or getting a new job then it might be time to increase your life insurance, especially if you haven’t evaluated your policy since you started your career.
Life insurance is there to replace your income if you should die. With a significant increase in salary usually comes a higher living cost due to you changing your lifestyle. You then need to increase your life insurance cover so that your family can continue with their new lifestyle that they have been accustomed to.
Don’t Cut Life Insurance Because of Debt
When you are struggling with debt, you will usually need to cut costs so you can save money and pay more towards debt, but the one expense that you shouldn’t cut is life insurance and in fact, you should increase your amount of cover. If you cut your life insurance policy at this time and something happens then your family will be left with your debt burden, but if you increase the amount of coverage and something happens to you, then your family will have enough to cover all your outstanding debts.
You Just Got Married
When you get married, you will have someone else in your life that can share the financial load and someone new to consider in terms of finances. If your spouse earns less than you or has stopped working, then they will rely on you financially. This means that you may need to increase the amount of life cover you have to ensure that your spouse can carry on living the same life if you were no longer around.
When you are no longer here, it’s life insurance that will care for your family financially. You should review your policy every couple of years or when your circumstances change to make sure that you have adequate protection in place for your family.