When Should You Increase Your Life Insurance Coverage? (5 Tell-Tale Signs)

Do you need to increase your life insurance coverage? Often, a need to add life insurance coverage comes with key life events, and it’s important to be on top of them. 

Your recommended life insurance coverage depends on your stage of life, your family size and status, your income, and much more. When those things change, your life insurance needs change. You can even increase your term life insurance coverage by purchasing a new policy. So, if any of these five things have happened to you, contact your Farm Bureau agent to discuss increasing your life insurance coverage.

1. You’ve Grown Your Family

When you get married, you make a commitment to care for each other. That includes individual life insurance policies that can help care for a spouse should the other pass away.

Adding a child to the family is a joyous celebration, but it’s also expensive. The average cost of raising a child is over $200,000. If one partner passes away, it can suddenly be a struggle to have enough money to pay for all of those expenses. An appropriately sized life insurance policy can help ensure that your partner has a safety net, and your children will be supported. 

2. You’ve Increased Your Financial Commitments

Having the right life insurance coverage gives you peace of mind that your financial commitments wouldn’t overwhelm your family if you were to pass away. If you’ve recently added to your financial responsibilities, such as starting a business, funding the care for an aging relative (either at home or a facility) or purchasing a new home, you should consider increasing your coverage.

3. Your Family’s Employment Status Has Changed

Congratulations! You’ve gotten a promotion or a significant raise. That change signifies the increased value you bring to your employer, and it also changes how much income you bring to your family. When your paycheck increases, consider changing your coverage to take into account your higher income.

You should also consider increasing your coverage if your spouse is no longer working outside the home. Paycheck replacement is an important reason many people have life insurance; if yours are the only earnings, a higher level of coverage could help alleviate the stress of your partner immediately finding a way to support your family.

4. Your Long-Term Needs Have Changed

The purpose of life insurance is to care for your loved ones even after you pass away. If someone you care for has been diagnosed with a chronic disease that requires additional care over their lifespan, or has suffered a life-changing injury, an increase in your life insurance coverage can help provide them with the ongoing support they need.

5. You’re Thinking About Estate Planning

An estate plan has many facets, and there are a variety of ways to transfer wealth, but don’t discount life insurance as a way to leave an inheritance. This is especially helpful if some of your heirs will be inheriting a farm or business. You can designate other heirs as a life insurance beneficiary to equalize the inheritances. Leave a legacy that you can be proud of, and that will show your dependents how much you care for them.

Protect Your Family

Talk to a Farm Bureau agent if you have experienced any of these life changes or if you think your life insurance coverage doesn’t meet your needs. Increasing your coverage can be an easy way to achieve the peace of mind that comes from knowing the ones you love are protected.