How your life insurance needs can change

Your life insuranceLife Insurance Insurance that pays cash to your family or other beneficiary after your death. This can give them income and help pay your funeral and other final costs.+ read full definition needs will change over time. For example, if you start a family, your need for life insurance will increase dramatically with new dependants. Conversely, as large debts such as a mortgageMortgage A loan that you get to pay for a home or other property. Often the loan is for 20 years or more. You make a set number of payments for a set amount each year.+ read full definition are paid off, you may need less life insurance.

Review your coverage regularly, especially if you go through any major life change. A life insurance agentInsurance agent A person who is trained and licensed to give expert advice and sell insurance. Some get extra training so that they can also sell investments. They get paid by the companies whose products they sell.+ read full definition can help you think through the coverage you need, and explore the different ways insurance can help you achieve your financial goals.

3 life events that can change your insurance needs

1. New dependants – Your insurance needs will increase if you gain a partner or children who rely totally or partially on your income.
2. Loss of a partner – If you lose a partner through divorce or death, your insurance needs will increase if you have dependants who now rely solely on you to provide. But if your partner was your only dependant, your insurance needs will decrease with their loss.
3. Repayment of debts – Your insurance needs will decrease as debts are repaid.

Calculate your life insurance needs

Most insurance companies have calculators on their websites.

Key point

Review your coverage regularly, especially if you go through any major life change.

2 questions to ask

1. Any change in your debts or dependants?
2. If yes, do you need more life insurance protection or less?