1. Getting Married
You’re no longer on your own; you have another depending on you. If either partner were to pass away think about the emotional and financial impact it could have. Your lifestyle is likely shaped around both of you contributing to your household income. Show your love by protecting each other with a life insurance policy. It may sound trite, but that peace of mind is so valuable.
2. Becoming a parent
If either parent were to pass away, would their income be missed? Many may think that only a working spouse needs life and disability insurance, but a stay-at-home parent or primary parent contributes substantially to the family as well. The estimated salary for a stay-at-home parent could be up to $178,000 based on 2019 data (from Investopedia.com and Salary.com). Regardless of whether both parents are employed, both parents need life insurance coverage.
3. Buying a Home
You likely just increased your debt obligations significantly. What happens if you die before that debt is paid off? Who will take over those payments should you pass? Would your family be able to stay in their home without your income? Getting life insurance coverage can allow your family to remain in a familiar environment when going through the difficult transition if a parent or spouse were to pass away.
4. Changing Jobs
Maybe you have a salary increase or are starting your own business. Do you still have life insurance? Typically, life insurance through work is not portable, meaning it is tied to the company and not the insured individual. Also, if the life insurance is provided as a benefit by the company you are taxed on the cost of any life insurance amount over $50,000. If your income has increased it’s time to consider if you need to increase your life and disability insurance amount as well.
5. Planning for Retirement
Do you still need life insurance in retirement? You may. If you still have debt obligations, such as a mortgage, a life insurance policy protects your spouse and heirs from having to sell the home or other valuables. Life insurance can also be used as a vehicle for inheritance since the benefit is paid out without being subject to taxes. Instead of leaving your savings as an inheritance, consider spending your money and buying life insurance to pass an even larger inheritance.
6. Becoming Single
Whether due to divorce, separation, or death, becoming single is a time to review and update your life and disability insurance needs. You may need to make changes to your beneficiaries due to a divorce and/or divorce decree; or you may need to increase your coverage to protect your dependents since you’re now a single parent. Either way, it’s an important time to comprehensively review your financial situation and plans.