According to a 2022 study, 41% of Americans say they either need to take out a life insurance policy or need more coverage. Perhaps more frighteningly, 44% acknowledge that their loved ones would face financial difficulties within half a year if a household wage earner unexpectedly passed away.

While they aren’t particularly pleasant statistics to think about, Domonique Rodgers of NC State explains that individuals can remove themselves from these figures by reviewing their life insurance coverage. 

Experts recommend that people review their life insurance policies at least once a year. However, this number should increase if any significant life events occur. Unbeknownst to the majority, policyholders can actually change their coverage at any time. 

Whether it be marriage, divorce, moving to a new home, children, or job changes, certain life events necessitate life insurance coverage reviews to ensure financial coverage for loved ones if the unthinkable happens. 

Key Times to Review Life Insurance Coverage

Job Change

Changing jobs can come with a plethora of new factors such as salary changes, which can impact the amount of life insurance coverage required.

On top of that, new employers may provide benefits that weren’t offered before, like death-in-service benefits.

Individuals should check which company incentives they can take advantage of and update their policies accordingly. That way, they can rest easy knowing their financial responsibilities are covered. 

Marriage

People getting married should consider reviewing their life insurance coverage to protect their spouse.

If a couple’s mortgage is the only thing they’re worried about, they may consider joint life insurance policies. Such coverage only pays out once to cover the debt, giving the newlyweds cheaper life insurance while they are alive. 

When joint policies aren’t preferable, individuals may want to change how their coverage is paid out, ensuring the proceeds go to their spouse upon their death.

Divorce

Divorce also necessitates policy changes due to financial impacts.

Joint policies aren’t necessarily divided, meaning one ex-spouse must decide whether to take over or start a new one. 

Beneficiaries likely change during divorces, too. So, a review is necessary to ensure the payout doesn’t head to the ex-spouse. 

Adding to The Family

Having a baby increases the number of financial dependents. Thus, ensuring the right life insurance coverage is vital to protecting the household. 

Some parents like to factor in childcare costs and school fees into their policy to give their children the best possible start in life whether they’re around or not. 

New Debt

Any time individuals take on new debt, they should increase the amount of life insurance coverage they have. That way, their beneficiaries won’t be saddled with unaffordable costs. 

Quit Smoking

Those who were smokers when they acquired life insurance can benefit greatly from letting their provider know they’ve quit. 

Of course, it’s fantastic for many health-related reasons, so individuals who’ve quit smoking for over 12 months are deemed non-smokers and save money on their life insurance policies. 

House Move

Finally, moving into a new house necessitates a life insurance policy review as there may be more debt to cover if a policyholder dies.