As we grow older, it’s inevitable that our lives will change. Nothing stays the same and neither should your insurance. Your life insurance should reflect your lifestyle, cover your expenses and the payout should be available to the people in your life who need it the most.
So with this in mind, we can all agree that life insurance cover should never stay the same for the entirety of our lives, but how exactly does our need for insurance change over time? In this article, we will explain why you will need life insurance at each stage of your life, why you should be making changes to your policy as you get older, and how it can be done.
Growing Older
When you’re young, fit and healthy with not a care in the world, life insurance is probably the last thing on your mind. But as you grow older and your health deteriorates, your priorities start to change. You won’t be alive forever, and you start to ask yourself what you’ll be leaving for your loved ones after you’re gone.
As adulthood creeps upon you, and you continue to spend the money you earn, and debts begin to pile up, who’s going to pay off your debts and mortgage when you pass away? With the right insurance cover, your debts will be taken care of. Even if you’re single and have no dependants, taking out a life insurance policy could significantly help your family if you passed away.
Earning More Money
If you’re making more money thanks to a recent promotion or career change, you have probably adjusted your lifestyle to suit your larger paycheck. Because you now have more money at your disposal, you will probably buy a bigger house, purchase a more expensive car or send your kids to a private school.
If you already have life insurance or income protection insurance in place, will it cover the expensive lifestyle you now lead? If not, it might be time to update your insurance details to reflect current earnings and living costs.
Getting Married and Buying a House
Having that special someone in your life opens your world up to new possibilities, and it also means you have another person in your life to look after other than yourself. If you already have life insurance in place, you’ll probably want to make your partner the beneficiary of your policy.
Things begin to get more complex when a house comes into the equation. If you and your spouse decide to buy a house together, both of you are likely to contribute towards the repayments. But how would your partner pay off the mortgage on their own if you were to pass away?
This is why buying a house is one of the major reasons why couples decide to take out life insurance; to ensure neither partner is left with the burden of paying off a mortgage. Thanks to the money they receive from the life insurance handout, they should have enough money to get by.
Having Children
Once children are brought into your world, your priorities shift in more ways than one. You want to protect your kids more than anything and taking out life insurance has to be one of the best ways to do that. This is especially the case for households that rely on one income.
Raising children is an expensive exercise at the best of times but if you lose your sole income earner, keeping up with expenses can be near impossible. That’s why your current insurance needs to be updated to cover the extra costs that come with having kids such as school fees and additional living expenses required to keep your family happy and healthy.
The death of a parent is a hard thing to overcome, and this is especially so if life insurance is not in place. If you haven’t taken the plunge into life insurance yet, now is the time to do it. With cover in place, you can trust that your children will still be looked after financially if you do pass away unexpectedly.
You should also make sure your children are listed as beneficiaries in case both you and your partner were to pass away.
Getting Divorced
If a relationship falls apart, divorce is often the unfortunate result. Both of your lives will head in different directions, and you will be settling into single life again, separated from the commitment and obligations that go along with marriage.
If you do ever get divorced, you will probably want to remove your ex-spouse as a beneficiary from your life insurance policy. Your expenses are also likely to change, so make sure this is factored in and changes are made to your policy if needed so you get adequate cover for your new circumstances.
Retirement
Once you reach retirement age, your kids have probably moved out of home, which cuts out a significant expense in your life. Many retirees may also own their property outright or choose to downsize their home or move to a retirement village which also saves on costs.
With all of this cost-cutting in your life, your need for life insurance is likely to decrease dramatically. You will probably want to make changes to your policy to equate for your lower living expenses. If you can afford it, you could choose to keep your life insurance as is to cover estate taxes, general living expenses for your partner and you could even have money left over to give to charity.
Why You Should Review Your Life Insurance Policy
If you don’t already have life insurance in place, all of these life stages will probably encourage you to consider it. Once you finally decide to purchase life insurance, it should then be reviewed whenever you experience any significant lifestyle changes.
Your life insurance needs will always fluctuate so you have to adapt. If you have too much cover, you risk paying too much money for a policy that is too excessive for your needs. And if your policy is not up to scratch, you risk having a payout that does not cover your expenses.
The biggest reason to review your life insurance policy is to save money. Take some time out of your busy schedule to look at the features in your policy and whether all of those extras are still needed. If there is anything that no longer needs to be included, take them out and your premium will likely reduce. Same goes with reducing your overall cover amount.
The other major reason to review your policy is to make sure you are not under-insured. You may need to add on some extras and features to cover any additional expenses, or you may wish to include other beneficiaries into your policy. The premium is likely to rise, but at least you know you will have adequate cover.
So whenever you reach any of the milestones mentioned above, remember to take the opportunity to review your cover and make changes where you see fit.
Making Changes to Your Insurance is Easier than You Think
Whenever you hit a new milestone in your life, whether it be getting a promotion, buying a house or having kids, it’s worthwhile reviewing your current cover to see if it still meets your needs. And luckily, it’s actually pretty easy to do it.
Reviewing your life insurance is as simple as calling your insurance provider over the phone to ask for details about your policy. Alternatively, if you took out cover through us at Cover Australia, you can contact us for expert advice and assistance for the life of your policy. We can also help you renew and make changes to your policy when needed. Just give us a call on 1300 366 817 to discuss any recent lifestyle changes and we can make sure you are fully covered.
Do keep in mind that any changes made to your policy are likely to affect your premium.
The areas of your policy you should be reviewing include:
- Basics of your policy
- Coverage amount
- Policy restrictions
- Policy benefits
Reviewing your life insurance also gives you a chance to shop around and see if another insurance company can offer the right level of cover at a more affordable price. It’s as easy as visiting our website to compare insurers quickly and easily.