6 Events That Increase Your Need for Life Insurance

Many people don’t truly understand the importance of life insurance until the moment they hold their child in their arms for the first time. Your child is looking to you for everything. That baby will look to you for support even if you’re unable to provide it.

Having children is a relatively well-known reason to purchase life insurance. But there are many other times in life when your need for life insurance increases. Even if you already have a policy in place, there are moments when you might want to add to your coverage in order to ensure your family is properly protected.

Many small business owners will borrow money from the cash value of permanent life insurance policies in order to help their businesses get through difficult times.

1. STARTING OR ADDING TO YOUR FAMILY

   Many people take out life insurance or add additional coverage when they first have children or add to their family. That’s because the loss of one parent’s income can be financially devastating for a family. Life insurance helps cover funeral expenses, daycare costs, debts and monthly expenses, and educational savings for the kids.

   Having enough coverage in place when a parent dies allows the family to focus on what’s important during the grieving process.

2. BUYING A HOUSE

   Buying a home is a big step for many people because it means being responsible for a mortgage. It’s critical to have life insurance in order to ensure that if anything happens to you, your spouse or partner will not face financial problems repaying the mortgage.

3. STARTING A BUSINESS

   There are a number of reasons life insurance plays an important role in business planning. If you have a business partner, life insurance could help him or her buy your share of the business from your surviving family. It could also protect investors, who may be concerned about their investment should something happen to you.

   RELATED CONTENT: Our Life Insurance Guide can help you learn more about life insurance and how it can benefit your financial plan.

   Another great reason to consider life insurance is that many small business owners will borrow money from the cash value of permanent life insurance policies in order to help their businesses get through difficult times.

4. SUPPORTING AGING PARENTS

   Many people provide financial support to their parents, but even more help them around the house. If something were to happen to you, your parents could suffer.

   Getting life insurance with the intention of taking care of your parents financially would give you peace of mind knowing that they will be well cared for even if something were to happen to you.

5. GETTING MARRIED

   Getting married means committing to sharing your life with someone, but it also means making a financial commitment to help care for and support them. If you were to die, what financial commitments would they still have?

6. TAKING OUT STUDENT LOANS

   If you co-signed for someone’s private student loans, you will be on the hook if something were to happen to that person.

   Since the death of the borrower is considered a default by lenders, you could be responsible for repaying the full balance of the loans. By getting a life insurance policy on the borrower, you protect yourself should something happen to the person you co-signed for.