You already realize the ideal time to get the term insurance policy is once you’re healthy and young. It is because you’ll secure an affordable rate for the entire period. Most importantly, you’ll enjoy knowing you’re insured; your family’s financial protection is assured.
However, things could alter. You may have purchased a 30-year contract when you were young and had no children. Ten years later, you’re married, making a much higher income, and raising a family of about a half dozen children. If so, the insurance you bought ten years ago might not be sufficient to protect your family members in the event of an unexpected happening.
Here’s what you require to know if you need more insurance coverage, whether due to changes in your financial circumstances, marital status, a situation about raising a family, or anything else.
Why You Might Require More Insurance Protection
In the illustration above, there are various reasons why you may require more life insurance for your term than you currently have. To remind you that your contract for life insurance provides the death benefit to your loved relatives in the event you pass away before the expiration of the term. The cash payout can get used for everything from funeral expenses to mortgage repayments to medical costs. If your financial requirements have grown significantly since you first purchased, you may require additional life insurance.
The reasons you may now be greater than the coverage you have:
Birth of a New Baby
A baby means more affection in your home. Of course, however, it can also mean an increase in expenses, from clothing and food to school costs in the future. You might need supplemental insurance if you didn’t anticipate these costs when purchasing your current insurance.
A New Job or an Increase in the Salary
Hey, you’re earning more money! Congratulations on your well-deserved raise or promotion or winning the lottery. With a more significant income comes higher costs. You may need more term life insurance if your loved ones suddenly become without your current, more substantial payment to provide support.
A Brand New Home
Mortgages and life insurance usually go hand-in-hand. It is because both are long-term financial obligations. A mortgage it’s committing to pay your lender an amount over some time, usually three years or a decade. When you purchase term life insurance, you agree to insurance that will pay for expenses, such as mortgage payments, for an identical period. You want to avoid burdening your family members with the burden of paying the mortgage that exceeds your current term life insurance coverage.
You’re Worried About Long-Term Healthcare
Suppose you’ve noticed an unexpected increase in medical costs resulting from an illness in your family or health issue. It could be an infant, an elderly parent, a sibling, or yourself. In that case, you may consider a different insurance.
Your Partner Has Stopped Working
In a relationship, each partner gets employed, and you share your life insurance policy accordingly. Suppose that’s no longer the case, for instance. If one of you has decided to stay at home with the child, you may require an additional term life policy that considers childcare costs.
Selecting the Appropriate Amount of Protection
In determining the additional coverage, you’ll need, and the period you can apply, the old principle of thumb is still in use but with significant caution. You’ll still need coverage for 5 to 10 times your annual salary. You can subtract the current coverage from this figure to determine your needed coverage.
You may ask yourself why you should apply for a supplemental insurance plan instead of canceling your existing policy. Remember that the amount you’re currently paying for insurance depends on your age and health status when you apply. It will be less expensive to purchase a new insurance policy for the extra amount you require.
Inquiring About Coverage
If you’ve had a significant event during the past few months or years, we wish you a happy one. If that milestone includes a baby’s arrival, a move to a new home, or a job change, you require further term life insurance coverage; we’re grateful that you could consider us. In the end, getting an additional insurance policy is an excellent method to ensure you’ve got the insurance your family and you require.
In Ottawa Life Insurance, We have been offering health, life, and group insurance for businesses and individuals in Ottawa. Contact us at (613) 454-1424 or email us at info@ottawa-lifeinsurance.ca for further information.
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