Planning for your family can be exciting. Unfortunately, there is one risk that can instantly push aside what you have thought out for the betterment of your loved ones: your untimely death. This is especially true if your household depends on your income. Thankfully, you can gain peace of mind and ensure they will still be able to pay bills by purchasing life insurance.
Once you acquire life insurance, remember that it is not a one-and-done process. This is because your needs can change quickly depending on the circumstances in your life. To paint a clearer picture, here are some scenarios you should consider to ensure that your life insurance coverage still fits your needs.
1.) Getting Married
Being married means entering a partnership that makes you depend on one another not only emotionally but also financially. Because of this, your financial plan should include an analysis of your life insurance needs. Since nothing in this life is certain except death, you and your partner need enough life insurance to cover loss in terms of financial obligations in case either one of you were to die unexpectedly.
2.) Buying a New Home
Buying a new home entails a big financial responsibility. This involves paying for a mortgage and other expenses, such as repairs, property taxes, maintenance, and utilities. If something were to happen to you, would your surviving partner or family members have the means to cover the mortgage costs? To allow your loved ones to keep the property after you pass on, make sure you have a well-thought-out life insurance plan.
3.) Building a Family
If you are planning to start your own family, be prepared to take care of a big financial responsibility. In fact, this responsibility begins even before you have a baby. A shocking statistic reveals that the cost of raising a child from birth to age 18 is over 240 thousand dollars—excluding college tuition fees. These are definitely huge expenses that you must be prepared for. This is why it’s important to get ready financially if something happens to you.
4.) Enjoying a Promotion
If you finally receive the promotion you have always wanted, your income increases. This also means that you may tend to spend more and elevate your lifestyle. For this reason, additional life insurance coverage may be needed so that you and your family can maintain your new spending obligations. A good rule of thumb is to upgrade your life insurance policy to 10-20 times your annual salary.
5.) Caring for Aging Parents
As you become responsible for taking care of your aging parents, you have to think about what would happen to them if you die unexpectedly. This is especially crucial if they depend on you financially. You’ll need to consider their housing, long-term care, healthcare, and other expenses when calculating the face value of your life insurance policy.
Your financial planning efforts determine your family’s financial future. If you are the primary income earner, you definitely have to think about your unexpected death and prepare how your loved ones would handle it. Since your life insurance will serve as the replacement of your income once you are gone, it’s best to partner with a certified financial planner to determine how much insurance you actually need so you don’t end up with too little or too much.
Calamita Wealth Management specializes in financial services, no matter what stage you are in your life. Our fee only financial planners can guide you through your insurance options and connect you with an insurance specialist. Get in touch with us today to plan for your financial future!