6 Reasons to Update Your Life Insurance Plan
Life is full of many milestones – from buying your first home to starting a family, watching your kids go off to school, and then reaching the ultimate milestone of a well-earned retirement. However, alongside being cause for celebration, all these milestones can also be opportunities for ensuring your loved ones are taken care of if anything ever happens to you.
Your mortality is probably not the first thing on your mind whenever you find yourself entering a new phase of life, but ensuring you have the right life insurance policy or simply keeping your policy up-to-date can give you a strong sense of security and help ensure that any dependents or other beloved family members will be looked after in the event of your passing.
Here, we’ve outlined six reasons to update your life insurance plan as your life changes, so that you can enjoy all of life’s special moments and milestones with confidence and peace of mind.
1. You’re Getting Married
Are you planning a wedding? Or have you recently entered another kind of lifelong partnership? Congratulations! You may want to add your life partner to your life insurance plan after you say, “I do.”
Though it may not seem like the most romantic task, adding your partner as a beneficiary to your life insurance plan will ensure their financial security if you pass away. It’s also a pretty simple process. And once it’s done, you can get back to enjoying the honeymoon phase, confident that you’ve done your best to care for your partner no matter what.
Pro tip: while you’re updating your life insurance to include your spouse as a beneficiary, we also recommend updating other insurance policies accordingly (i.e. your home insurance, health insurance, etc.). Use our insurance guide for newlyweds for more information on how best to update all your policies upon getting married.
2. You’re Expanding Your Family
Welcoming a new child to your family can be one of the most exciting (and busy!) times of your life. Amidst the joy and chaos of being a new parent, it’s essential to think about your child’s future. Updating your life insurance plan to include your family’s latest addition is a responsible step to secure your child’s future if something happens to you.
Thankfully, your life insurance provider can help you choose the coverage plan that will set your children up for the life you dream of for them. With this peace of mind, you can cherish every precious moment with your growing family.
3. You’re Buying a Home
Purchasing a new property is a huge achievement, but managing a new mortgage may initially feel overwhelming. Did you know you can update your life insurance plan to cover your mortgage if you can’t?
This update can be especially important if you are your household’s primary provider. With your life insurance policy updated to account for your home and its mortgage, your family could stay in their home if the worst were to happen to you — even if you hadn’t finished paying off your loans yet.
A life insurance calculator can also account for your mortgage and other expenses to give you a general idea of how much your plan can cover. You can find a life insurance calculator tool easily online, ensuring that you can proceed with your policy update with greater confidence.
4. Your Professional Life Has Changed
Whether you’re getting a promotion or becoming your family’s sole breadwinner, your life insurance policy could probably use an update if your work situation has recently changed.
The higher income accompanying a new job title may increase your spending habits. Updating your life insurance plan to cover these expenses will help sustain your family’s lifestyle after you’re gone.
Likewise, you may seek to increase the cover of your life insurance policy if your partner decides to become a stay-at-home parent, or is otherwise unable to work themselves, seeing you go from a double-income to a single-income household.
If you are your family’s only source of income, the idea of leaving them behind can be very unsettling. You can ease these concerns by increasing your life insurance policy coverage to provide for your family in the event that something happens to you.
5. You’ve Changed Your Lifestyle
When you first purchase a life insurance plan, you’ll usually have to answer some questions about your general health and lifestyle to determine which plan is appropriate for you.
Engaging in high-risk activities like motorcycle racing, bungee jumping or skydiving can impact your life insurance plan premiums. Certain careers may also be considered higher risk than others, such as jobs where you use dangerous machinery.
However, if you’ve traded your extreme hobbies for something a bit tamer, it may be time to reassess your life insurance plan. You may be eligible for lower premiums!
Contact your life insurance provider to see if your plan can ensure the security of your loved ones for less.
6. You’re Planning For Retirement
Life has likely changed a great deal since you first took the step to purchase a life insurance plan.
As you start to think about retirement, you may also be caring for aging parents or watching your children start families of their own. Now is the perfect time to reevaluate your situation.
Life insurance becomes even more important as we age. You can tailor your current plan to meet the needs of this new chapter of your life and protect the life you worked so hard to build.
By purchasing a life insurance plan, you’ve already taken the first step to care for your loved ones if something happens to you.
As you move through the next stages of your life, updating your life insurance plan will ensure that your coverage accurately reflects where you are and what you want to leave behind.
From starting your family to buying a home to planning your retirement, consider whether you should update your life insurance plan and rest easy as you move forward.
