When to review your life insurance

5 life events that mean it’s time to reevaluate your coverage

Life insurance is not a once-and-done kind of purchase. Over time, your needs will change and so may the level and type of coverage that’s appropriate for your situation.

Anytime you go through a major life change, it’s time to step back and make sure you have the coverage that’s right for you. Here are five examples.

1. Getting married

So you’ve found the person you want to spend the rest of your life with — congratulations! Now you’re looking forward to building your future together.

Naturally, you want to help protect that future. That’s where life insurance comes in. If one of you were to pass away unexpectedly, the life insurance benefit could help replace that lost income and ease the financial strain at a time of great emotional stress.

2. Getting unmarried

Relationships can be challenging, so it’s probably not surprising that about 14% of Canadians aged 24 to 65 identify themselves as separated or divorced.

So if getting married is one of the main reasons many people purchase life insurance, does separating mean you should cancel your coverage? Not necessarily. In fact, there are many valid reasons for keeping it in place. If you and your former partner have children together, for example, you’ll want to make sure that they will have financial support if something were to happen to you. That means keeping your coverage in place until your kids reach adulthood, or longer if they have additional needs.

The other key reason to keep your existing coverage is cost. Insurance rates are based partly on your age when you apply. With term life insurance, the premiums you pay stay the same for the length of the term contract (typically 10 or 20 years). So if you cancel your policy now and then a few years down the road you decide you need coverage again, chances are your premiums will be higher.

One thing you will definitely want to do if you split with your significant other, however, is revisit your beneficiary designation. You may not be comfortable having the policy proceeds go to your ex.

3. Buying a home

Owning a home is an important goal for many Canadians, especially younger couples looking to settle down and start a family. But with the average market price for a home sitting at more than $700,000 in 2021, it represents a significant financial commitment.

On the positive side, interest rates remain near record lows and repayment can be spread out over many years, helping to bring homeownership within reach for many families. But what if one of the primary breadwinners should pass away?

Term life insurance can help protect your family and your investment in your home. You can take out sufficient coverage to pay off or pay down your mortgage if something happens to you or your spouse.

4. Having a child

Expecting a child or looking forward to adopting? Your world is about to be turned completely upside down — but in a good way!

From 2 a.m. feedings to sleepless nights, you love your kids unconditionally and want to keep them safe from harm. And life insurance can help. While nothing could ever replace you in your children’s eyes, life insurance can provide financial support to help fulfill the dreams you have for them if you’re no longer in the picture.

Note, too, that it’s important to have coverage for both parents, even if only one earns an income outside the home. On any given day, stay-at-home parents are caregivers, chefs, chauffeurs, housekeepers and confidants all rolled into one — replacing those positions doesn’t come cheap.

5. Caring for parents

Your parents were always there for you when you were growing up and now that they’re getting on in years, you want to return the favour. As they get older, they may need support in a number of ways — from home maintenance and grocery shopping to travelling to medical appointments. They may even need your financial support or need to move in with you where you can be there at all times.

If something were to happen to you, you’d want to make sure that they would still get the care that they need. And life insurance can help provide the money to make sure that happens.

Next steps

Significant life events tend to have a ripple effect. So anytime your life changes, be sure to consider the potential impact on your loved ones. Term Life insurance, like that available through CoverMe can help provide the financial security you want for them.