{"id":25630,"date":"2023-12-07T10:15:00","date_gmt":"2023-12-07T15:15:00","guid":{"rendered":"https:\/\/lifehappens.org\/?p=25630"},"modified":"2024-11-22T10:56:55","modified_gmt":"2024-11-22T15:56:55","slug":"life-insurance-5-signs-you-might-be-underinsured","status":"publish","type":"post","link":"https:\/\/lifehappens.org\/blog\/life-insurance-5-signs-you-might-be-underinsured\/","title":{"rendered":"Life Insurance: 5 Signs You Might Be Underinsured"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; _builder_version=&#8221;4.27.3&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; global_colors_info=&#8221;{}&#8221; theme_builder_area=&#8221;post_content&#8221; background_color=&#8221;RGBA(255,255,255,0)&#8221; sticky_enabled=&#8221;0&#8243;][et_pb_row _builder_version=&#8221;4.22.1&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221; theme_builder_area=&#8221;post_content&#8221;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;4.22.1&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221; theme_builder_area=&#8221;post_content&#8221;][et_pb_text _builder_version=&#8221;4.27.3&#8243; _module_preset=&#8221;default&#8221; header_3_font_size=&#8221;36px&#8221; global_colors_info=&#8221;{}&#8221; theme_builder_area=&#8221;post_content&#8221;]<\/p>\n<p><span>If you have dependents\u2014or just loved ones who you want to take care of after you die\u2014life insurance is critical. This coverage helps ensure your lost income doesn\u2019t translate to tangible material losses for your family once you\u2019re gone.<\/span><\/p>\n<p><span>But how much life insurance is enough? That\u2019s a question whose answer can change significantly over your lifetime, and an important one to answer correctly.<\/span><\/p>\n<h2><span>You may be underinsured with life insurance coverage if\u2026<\/span><\/h2>\n<h3><span>1. Your only life insurance coverage is through your employer.<\/span><\/h3>\n<p><span>While some life insurance is certainly better than no life insurance, if your only coverage is through your employer, <a href=\"https:\/\/lifehappens.org\/blog\/life-insurance-from-your-employer-usually-isnt-enough\/\">you may not have enough<\/a>. These plans generally offer very limited coverage (like a year\u2019s worth of your salary, maybe two), which is unlikely to be enough to meet your family\u2019s needs if you have any significant debts or children whose college educations you\u2019re hoping to help fund.<\/span><\/p>\n<p><span>Furthermore, life insurance offered through your employer is usually contingent on you keeping that job, so if you leave your position for any reason, the coverage disappears. <\/span><\/p>\n<p><span>Finally, buying an individual policy gives you access to different types of life insurance policies, including <a href=\"https:\/\/lifehappens.org\/life-insurance-101\/permanent-insurance\/\">permanent life insurance<\/a>, which has living benefits you can use while you\u2019re alive.<\/span><\/p>\n<h3><span><\/span><\/h3>\n<h3><span>2. Your income went up.<\/span><\/h3>\n<p><span>Getting a raise is almost always a good thing, but if you\u2019re making significantly more income today than you were when you first bought your life insurance policy, you may find yourself underinsured. A higher income usually comes with associated lifestyle changes, and learning how to live with less is likely the last thing your loved ones will want to do if you depart unexpectedly.<\/span><\/p>\n<h3><span><\/span><\/h3>\n<h3><span>3. Your stay-at-home spouse doesn\u2019t have life insurance.<\/span><\/h3>\n<p><span>If your stay-at-home spouse doesn\u2019t have life insurance coverage, <a href=\"https:\/\/lifehappens.org\/blog\/the-stay-at-home-parents-guide-to-buying-life-insurance\/\">you\u2019ll want to consider getting them a policy<\/a>. Even if they don\u2019t make an income that would need replacing, they perform valuable services like childcare that would need to be paid for if they\u2019re no longer there. <\/span><\/p>\n<p><span><a href=\"https:\/\/lifehappens.org\/videos\/still-watching-over-them\/\">Watch the Virgen family\u2019s Real Life Story<\/a> to see just how critical life insurance was for a family who, thankfully, insured Teresa, a stay-at-home mom. If not for the insurance, they\u2019re certain that they would have lost their home.<\/span><\/p>\n<h3><span><\/span><\/h3>\n<h3><span>4. You had a child.<\/span><\/h3>\n<p><span>As every parent knows, having a child is expensive\u2014in fact, in 2023, raising a child costs <a href=\"https:\/\/abcnews.go.com\/GMA\/Family\/states-costs-raise-child\/\">more than $21,000 per year on average<\/a>. (And that\u2019s before you factor in college!)<\/span><\/p>\n<p><span>All of which is to say, if you\u2019re a new parent or you brought an additional child into your family, it\u2019s a good time to review your life insurance coverage and ensure you have enough to meet your dependents\u2019 long-term needs, including food, shelter and education, until they\u2019re of age. Given the high cost of childcare (and the precarious financial position of an underinsured single parent), even one child can increase your life insurance needs significantly.<\/span><\/p>\n<p><span><\/span><\/p>\n<h3><span>5. You bought a new home.<\/span><\/h3>\n<p><span>Paying the mortgage is one of the most pressing financial needs for any family\u2014and more pressing, still, for a newly widowed spouse. If you purchased a new home since you first got your life insurance policy, you may find that you need more coverage to help ensure your loved ones can successfully pay down that debt. After all, moving is never fun, especially in the face of a tragic loss.<\/span><\/p>\n<p><span><\/span><\/p>\n<p><span>While it can feel overwhelming to determine how much life insurance coverage you need as your financial situation changes over time, it\u2019s also well within your power to ensure you\u2019re sufficiently covered. Life Happens\u2019 <a href=\"https:\/\/lifehappens.org\/life-insurance-needs-calculator\/\">Life Insurance Needs Calculator<\/a> is a great starting point for estimating how much coverage you need. A half hour of work today can translate to years\u2019 worth of financial stability in the future.<\/span><\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How much life insurance is enough? That\u2019s a question whose answer can change significantly over your lifetime, and an important one to answer correctly.<\/p>\n","protected":false},"author":64,"featured_media":25631,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[4],"tags":[366,590,600],"class_list":["post-25630","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-life-insurance","tag-life-insurance-coverage","tag-life-milestones","tag-underinsured"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.8 (Yoast SEO v23.8) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Life Insurance: 5 Signs You Might Be Underinsured &#8211; Life Happens<\/title>\n<meta name=\"description\" content=\"How much life insurance is enough? 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