How Life Changes Impact Your Life Insurance Needs
Getting married, having children, buying a home, and other major milestones often necessitate revisiting your life insurance coverage. As your life circumstances evolve, so do your financial obligations to loved ones. Ensuring adequate life insurance protection can provide them critical financial support if you pass away unexpectedly.
Tying the Knot
When you marry, you and your spouse often jointly manage finances and share goals for the future. An untimely death can jeopardize those plans and leave the surviving spouse struggling.
Life insurance provides income replacement if the primary breadwinner dies, but it also offers protection if the stay-at-home spouse passes away. They likely handle valuable household duties like caring for children, meal preparation, and home maintenance. The income from a life insurance policy can help the surviving spouse pay for childcare, housekeeping, and other services.
Expanding Your Family
Children represent immense joy and fulfillment, but also considerable expense. From birth through age 17, a middle-income family spends approximately $310,000 per child, according to recent government estimates.
And more young adults now live with their parents longer, increasing costs. If you pass away, life insurance proceeds can help fund your children’s upbringing, college education, weddings, and other needs. Permanent life insurance can also provide lifelong care for a child with special needs.
Purchasing Major Assets
Milestones like homeownership often require large debts like mortgages and home equity loans. College students also take on substantial private education loans.
If you share these debts with a partner and then die prematurely, your partner could struggle to singlehandedly manage the payments. Life insurance can provide funds to settle or continue paying down joint debts so survivors maintain financial stability.
Starting a New Job
When moving from one job to another, you often lose access to employer-paid group life insurance from your previous employer. Porting this coverage to an individual policy ensures your loved ones retain income protection.
If your new job comes with a salary boost, you may need more life insurance if you have upgraded housing, vehicles, vacations, and more. Life insurance can help fund the lifestyle for surviving dependents. Experts recommend considering purchasing enough to cover all living expenses, less any savings and assets.
Launching a Small Business
Entrepreneurs pouring passion into their ventures may neglect personal risks like unexpected death. But the untimely passing of a business owner can devastate their company’s financial health and stability.
Partners may struggle to stay solvent, fulfill obligations, pay outstanding debts, and ultimately help the business survive. For workers, an owner’s death could signal lost jobs and wages. Life insurance provides vital capital for transitions like hiring talent, bringing on partners, securing investors, or selling the company.
Becoming a Caregiver
Americans now live around 78 years, often needing family care in the later stages of life. If you suddenly pass away while assisting aging parents financially or physically, insufficient savings could leave them without quality care options.
Life insurance can supply funds for daily living assistance, medical treatments, mobility equipment, residential care, and more. You can designate payouts to facilitate a loved one’s independent living for years to come.
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