Life Events That Cause People to Purchase Life Insurance

When you’re a teenager or young adult and you still live with your parents, buying life insurance is usually the last thing on your mind. But as you grow older and take on more responsibilities, you might start to wonder whether or not it’s time to get some added protection for your loved ones in the event you pass away. Here are some of the most important life events that cause people to purchase life insurance:

  • Taking out a student loan: According to CNBC, 70 percent of college students graduate with a student loan. On average, a student loan amounts to $37,172 — and that’s a tidy sum. If your parents co-sign on your student loan, buying a life insurance policy with them as the beneficiaries will help them pay off your loan if you pass away.
  • Getting married: Your partner will have to pay your final expenses, as well as any debts — such as credit card debt and a car loan — you have if you pass away. Additionally, your partner might depend on your income while he or she finishes school, so a life insurance policy payout can help.
  • Buying a home: A mortgage is a long-term commitment that doesn’t resolve itself if you pass away. A life insurance policy can help your spouse or other relatives pay off your mortgage.
  • Becoming a parent: When you have a child, he or she will depend on your income until adulthood. Make sure to purchase a life insurance policy that offers sufficient coverage for your child’s living expenses and education for between 18 and 22 years, depending on whether or not you expect him or her to go to college.
  • Getting a promotion: A lot of times, when you’re promoted at work, your standard of living goes up. You might move to a larger home or even buy a vacation home. That means it can be time to ramp up your life insurance coverage to better reflect the needs of your beneficiaries in the event you pass away.
  • Retirement: Although a lot of us have fewer financial commitments after retirement, it’s still advisable to think about how your death would financially impact your loved ones. If you don’t already have a final expense policy, now’s the time to purchase one to cover your end of life costs, as NerdWallet advises. Usually, a final expense policy offers between $10,000 and $25,000 of coverage for things like funeral expenses.

If you’d like further information about when it’s advisable to buy a life insurance policy, please contact our offices. As an independent life insurance broker, we’re well-positioned to give you objective advice and help you select the policy that’s right for your specific situation.

Sources

https://www.cnbc.com/2018/02/15/heres-how-much-the-average-student-loan-borrower-owes-when-they-graduate.html

https://www.nerdwallet.com/blog/insurance/life-events-affect-life-insurance/

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