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Key points
Life insurance is a vital type of insurance protection that’s important for everyone to have if loved ones depend on their income or the services they provide.
My husband and I each bought life insurance when we got married years ago to protect each other financially in case something happened to either one of us. But, in 2022, I intend to buy more life insurance coverage than the amount I've had for a decade. Here's why I'm planning to increase the death benefit on my term life insurance policy.
I have decided to purchase more life insurance in 2022 because my husband and I will be adding a second child to our family in March.
We had our first child in 2019 and didn't buy additional coverage at the time because we felt that the death benefit on our existing policy limit was high enough that our child would still be provided for even if something happened to one of us. But now, with adding a second child to the mix, we are concerned the policy limit wouldn't be enough and it could result in some financial struggles if one of us passed.
See, not only do I work and earn the income that I bring into the family, but I'm also the primary caregiver for my child because my job has more flexible hours. If I passed away, my husband would need to hire childcare help for not one but two children, and that would be a huge added cost that would take a bite out of the income he'd have remaining after I passed.
Having two children also means we'll need to shoulder the cost of two college educations, which will come at a price I shudder to think about when my kids reach college age decades from now. I don't want to leave my family struggling, so I'm going to be contacting my life insurance provider and taking steps to increase the amount of the death benefit my family would receive if something happened to me.
Any time a person goes through a major life change, it's a good idea to review life insurance coverage and make certain that it is still going to provide enough protection.
The change in my life happens to involve having a baby, but many other shifts in circumstances could call for the purchase of additional insurance protection. This could include marriage, assuming the responsibility of care for aging parents, adding a new dependent to the family, becoming the family's sole breadwinner, or divorcing.
It's important not to assume that just because a life insurance policy is in effect that there are no additional changes that will need to be made. By taking the time to re-evaluate current coverage needs regularly, it's possible to ensure the right protection is always in place so an untimely death won't lead to financial disaster for those who are left behind.
Insurance is not something we often think about until we need it and typically that means you aren't spending much time researching what is best for you and your personal situation. Taking the time to educate yourself on the basics of insurance, whether it's how to get discounts on your homeowner's insurance policy or the best way to get a car insurance quote, will help you save money and ensure you have the right insurance coverage for your needs.
Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.
