Various Stages Of Life Require Various Coverage Levels

By Abbey Wagner, InsWeb

Studies show that over 25 percent of American households lack any member with life insurance. And the approximately three quarters of us who have life insurance do not have adequate coverage levels for the stage of life we are in. It is important to review your policy as your life changes, to ensure that your coverage is sufficient for your new needs. Review the list below that points out some of the stages of life during which you should reexamine your life insurance policy.

• Just Married? While most childless newlywed couples do not need extremely high levels of life insurance coverage, once you add any type of ownership to the deal, it is important to make sure you and your loved one are covered in the event of a catastrophe. If you buy a house, this becomes especially important. Many people are comfortable and easily pay their mortgage payments when they are part of a two income household (with no dependents), but many would struggle if something were to happen to their partner and they had to survive on their income alone. Be sure to cover each other with moderate amounts of life insurance, even if you are barely out of the chapel.
• Having Kids? In addition to other important forms of insurance, such as health insurance and coverage for catastrophes such as fire, flooding or burglary, it is also important to make sure that you will be able to take care of your kids. If your spouse were to pass away, would you be able to provide for your children's many needs? Or, if you were a stay at home parent and the major breadwinner of the household were to pass away, how would you take care of your child(ren)? Make sure you and your spouse have adequate life insurance coverage to protect both yourselves and your children.
• Find Yourself Single Again? Unfortunately, a fairly large percentage of marriages in the U.S. end in divorce, and if you find yourself single again, it is important to reexamine your life insurance needs. It is even more important if you have kids. If they live with one of you, what would happen if you were to pass away? Would your children be okay? Would their new guardians (whether or not this is your ex-spouse) be able to take care of them? Be sure to look over your life insurance coverage, keeping your new situation in mind, if you have just gone through a divorce.
• Find Yourself Wealthier? Studies show that nearly 65 percent of the affluent in the U.S. lack adequate life insurance coverage. Wealthy working people are advised to purchase life insurance at 7-10 times their annual household income. When you or your spouse get a large raise, own a company that takes off, come into a large amount of money through inheritance, or sell something of value, do you think to reexamine your life insurance coverage? Most of us don't, and we all should.
• Retiring? Entering/Traveling Through Your Golden Years? Life insurance needs may not be as high as they are at other stages in life for most new retirees. But, it is also true that most new retirees (especially if they are now a senior citizen) do need to think about maintaining an adequate level of coverage. Consider your children or spouse you may leave behind. Even though your children are grown and on their own, and your spouse may be able to live comfortably on his or her retirement savings, there are many special circumstances in which they may find themselves in financial trouble if you were to pass, or vice versa, you if they were to. If you are very ill before you pass away, you will incur many health costs, many of which may be passed on to your spouse or children if you pass away. Many seniors may have to live with a child if they are on their own and need help, and this may put a financial burden on the affected family members. There are also funeral costs to consider. It is important to ensure that your family members can recoup any financial losses after you pass away. It will already be hard enough for them to lose a loved one; it shouldn't be financially hard as well.

Non-profit insurance organizations recommend that all of us reexamine our level of life insurance coverage at least once a year. Are you making sure to cover your changing life?