When Your Life Changes, So Should Your Life Insurance Coverage

Click to see manage your risk diceRegularly reviewing your life insurance coverage should be an integral part of your overall financial planning process. In fact, when you initially purchase a life insurance policy, you are not yet finished with this component of your financial  plan, but rather, you’re just beginning – especially as you experience major life changing events throughout the years.

As you progress through life, many changes will likely take place – and with these changes, your needs for life insurance will usually also be altered. In some instances, it may mean that you should raise or lower the amount of death benefit that you carry, and in others, it could signify that you revise the type of policy that you own.

What Are Life Changing Events?

Throughout life, you will experience various milestones. These could include graduation from college and obtaining your first real job, getting married, and starting a family. Unfortunately, there are some other events in life that are not as positive such as job loss, divorce, or death of a spouse or loved one.

In any of these cases, though, it is essential to ensure that your financial goals remain on track with the events that have taken place. And typically, this means determining whether or not the amount of life insurance coverage that you are carrying is enough given your new situation in life.

When You’re Just Starting Out

For those who are just starting out in life, it is likely that the last thing on your mind is purchasing life insurance. Unfortunately, even for those who are young and healthy, unexpected illness and accidents can – and often do – occur. Without the proper amount of life insurance, you could be leaving loved ones open to potentially devastating financial consequences without the right amount of coverage in place.

For example, many young couples purchase a first home based on both spouses’ incomes. In this scenario, though, the sudden death of one spouse could cause the other to lose not just a partner, but also their home, without the income replacement that a life insurance policy could provide.

Kids, Family and Future Plans

Raising Kids and Life InsuranceStarting and raising a family can also bring about many life changing events that can cause the need to alter or enhance life insurance coverage – even if you already have a plan in place. For example, each time a couple experiences the birth of a child, they are likely to incur additional expenses for food and clothing, as well as future expenses for education.

The loss of one or the other parent could signal a significant financial disaster without some type of life insurance coverage in place. Losing the income of a wage earner can affect a family’s lifestyle in obvious ways. Yet, replacing all of the duties of a stay-at-home parent can also be very costly, so coverage truly is essential on both.

When you’re young and single, the need for life insurance coverage may never have entered your mind. Yet, as you move into a new stage of your life and you begin to start a family, your financial situation will be changing in some very significant ways.

In addition to taking on a parental role, your financial responsibility – both short and long-term, will also need to adapt. And this should include planning ahead for any unforeseen circumstances – just in case.

Why You Need Life Insurance Now More Than Ever

Today, many families with children – both young and older – are depending on two incomes in order to make ends meet. Yet, if something were to happen to one of the breadwinners, what would happen to the family’s standard of living?

In your case, would you be able to stay in the same house? Drive the same cars? Go to the same entertainment events? And would the kids be able to attend the same schools? If not, then it is likely that there is a real need for life insurance.

But these are just your immediate financial needs. What about plans for the future? If you wouldn’t be able to meet today’s expenses without one parent’s income, what would happen to that college savings fund? Or the money that could potentially help to pay for a child’s future wedding?

Any or all of these situations could easily be paid for with the proceeds from a life insurance policy.

Life Insurance is a Financial Tool

While most people tend to think about life insurance as only paying for funeral costs, the truth is that this coverage can do so much more. In fact, life insurance is actually a financial tool that can be designed to do a number of things – including keeping your life in check after the loss of a loved one.

Proceeds from a life insurance policy can be set up so that those you love don’t have to move out of the house that they call home, so that they don’t have to leave the school or the neighborhood where they feel comfortable because they can no longer afford to live there, and so that they can go on paying the bills during an already emotional time – and thereafter.

Essentially, life insurance is a tool that can ensure that you’re able to keep taking care of your children, even if you are no longer there to do so. In that regard, life insurance helps you to keep your promises.

What About a Stay-at-Home Parent?

While there are some cases where both of a child’s parents work, there are others where one is the primary income earner while the other stays home and takes care of the majority of the care giving duties such as cooking, cleaning, transportation, and other important household tasks.

While many have the misconceived notion that life insurance is only needed for the parent who earns the income, this is actually not the case at all. In fact, if you really sit down and add up what it would cost to replace all of the tasks that are done by a stay-at-home parent, the figure would be astounding – especially if these services were needed to care for young children over a period of many years.

With this in mind, it is important to cover both an income earning parent, as well as a stay-at-home parent with an appropriate amount of life insurance coverage.

What If You’re a Single Parent

If you’re a single parent, your need for life insurance is actually multiplied. This is because you are likely to have taken on the role of both the income earner, as well as the caregiver to your children. With so much responsibility, a good life insurance policy should be a part of your overall plan to ensure that your children are well taken care of, even if the unthinkable should occur.


Click to enlarge picture of young coupleAs a newly married couple, there are bound to be many changes in your life. Starting out on your journey together, there will be lots of planning to do – not just about the wedding itself, but also with long-term decisions regarding where to live, when to start a family, and where to eventually retire and grow old.

Certainly, a common thread that surrounds many of the plans that you make is the financial aspect of how they will be accomplished. For instance, it is likely that some of your larger goals like purchasing a new home will require a significant amount of saving prior to moving forward.

Yet, even the best laid plans can be changed unexpectedly – and if the unthinkable were to occur, isn’t it better to be prepared?

Being Prepared Together

Once you are married, nearly all of your decisions will be made together as a shared venture – buying a new car, qualifying for a home mortgage, and possibly even opening a new business. With that in mind, if one partner were to suddenly no longer be there, what would happen financially to the other? Would they be able to go on, or would that change everything?

Having life insurance could provide the finances for the other to continue onward – even in the worst of circumstances. This financial cushion would be especially important if there were children involved who were also dependent on the deceased partner’s income.

For couples who plan their lives together, the loss of one or the other partner could literally mean the inability to pay bills, a vast change in lifestyle, and oftentimes the eventual foreclosure and loss of the place that they call home.

But life insurance can stop that from happening by providing the funds that are needed to replace lost income, pay off debts, and continue the survivors’ lifestyles – which is essential for them in an already emotional time.

What Type of Life Insurance is Best for Young Married Couples?

While your budget may already be stretched, there is a way to secure the life insurance protection that you need at a very reasonable premium cost. In most cases, the best type of life insurance coverage for young married couples is term.

This type of life insurance coverage provides a death benefit that lasts for a set period of time – or “term” – such as 10 or 15 years, provided that premiums are paid. For an insured who is young and healthy at the time of application, term life insurance can provide a substantial amount of coverage for a very reasonable premium cost.

The low premiums on term life insurance can make it easy to budget for, while still allowing you to factor in other expenses through the economic ups and downs of a new couple’s lifecycle. Many term life insurance plans will also allow you to convert to a permanent life insurance policy over time if you decide to keep the coverage in the future.

How Much Coverage Do You Need?

Although there are many “rules of thumb” for determining how much life insurance coverage you need, the actual amount will vary depending on a couple’s specific situation and budget. For example, there may be a large difference between the amount of income that each of the partners earns. While one may be considered the “breadwinner” and the other the stay-at-home spouse, each should be insured accordingly.

Likewise, the amount of debt and regular living expenses should also be factored into the equation – especially if the life insurance will be used as a means of income replacement for the surviving spouse.

Retirement Planning

One of the biggest life changes that people go through in life is when they leave the world of employment and step into retirement. Even though most people dream of the day that they can relax on the beach, when the employer’s paycheck stops, it is essential to know that income will still be arriving on a regular basis. Life insurance can help to ensure this in several ways.

In fact, life insurance proceeds are often used as income replacement for a surviving spouse in retirement. This is especially the case if the income stream from a company pension will cease upon the death of one individual, leaving the other spouse without a significant portion of their incoming cash flow to pay for everyday living expenses.

Insuring Your Promises – For Better or For Worse

In addition to providing a financial cushion to survivors, life insurance also gives something else – it provides peace of mind in knowing that a spouse will be taken care of, a house will remain a home, and promises will be kept, regardless of what happens in the future.

Taking the Next Step

When determining the proper type and amount of life insurance coverage, it is important to work with an agent who can look at the whole picture and help you to anticipate any potential upcoming life changes that may need to be covered. That way, you won’t be caught without enough if the unexpected were to happen.

It is also good to work with a professional who has access to several different insurance companies. That way, you will be able to compare various policies and determine which one best meets your current and future potential life insurance coverage needs.

At BestLifeQuote we can help you compare coverage and rates and apply for life insurance. Use our instant quote form on this page, or call us at 888-552-6159. 

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Doug Mitchell

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