So you’ve hit another traditional life milestone – you’ve recently gotten married, had a child, started a business, or bought a home. As your life changes, often the bills and responsibilities do, too. Actually the bills and responsibilities always increase.

That’s just life. Speaking of life, you might be wondering when you should increase your life insurance. And if that’s the case, you’ve come to the right place.

In this helpful article, we’ll unpack why a life insurance policy should be increased, specific reasons why you would want to increase your life insurance, and how to increase your life insurance (also referred to as your ‘sum assured’).

Increasing Your Life Insurance – Yay Or Nay?

There are a number of reasons why you might choose to increase your life insurance, which we’ll unpack below. But really, in answer to the question of whether or not you should increase your level of cover, yes.

You see, regardless of whatever changes occur in your life, the one constant that affects everyone is inflation. Your life insurance policy will pay your family’s living expenses when you pass away, however if those living expenses have increased and your sum assured hasn’t, your family may not be able to afford all the expenses you wanted to provide for.

For this reason alone, increasing your life insurance is a good idea.

Reasons Why You Might Increase Your Life Insurance

Generally, life insurance policies undergo an annual review and may be increased upon reassessment of your age and stage of life. However, if an annual review isn’t a given with your insurer, then there are several other reasons you should review your policy.

Here are 10 reasons you might want to increase your life insurance:

1. Your Group policy isn’t enough – If you have life insurance via your employer and it isn’t enough to cover your family’s expenses, then it might be a good idea to increase your level of cover.
2. You’re making more money – If your sum assured was limited to what you could afford and you now earn more money, you should probably consider increasing the amount you have.
3. Getting married – Your priorities change when you get married, and if you die you’ll want to provide your spouse with a sum of money, which means increasing your cover.
4. You started a family – Having children increases the number of people who are financially dependent on you, and your life cover will probably need to be adjusted.
5. You have long-term debt – If you’ve taken on any debts after initiating your life cover, you might need to increase your sum assured in order to cover what you owe.
6. You’ve invested in a home – Purchasing a home, especially if you’re using home finance may need you to increase your life insurance to cover the bond in the event of your death.
7. Estate planning – Check your estate plan to ensure that there is sufficient liquidity in your estate in the event of your passing and if there isn’t, consider increasing your cover.
8. Your partner is no longer working – If your partner or spouse is no longer employed (regardless of the reason), you may want to increase your sum assured to help provide for them when you and your income aren’t there.
9. You’ve taken on additional financial responsibilities, which means that you’re being relied on financially for new expenses that will need to be paid in the event of your death.
10. Your long-term plans have changed, like you’ve started financially supporting an elderly parent. It could be smart to increase your coverage amount to account for these new expenses.

How To Increase Your Sum Assured

Let’s say that you’ve reviewed your life insurance policy and have decided that it’s time to increase your level of cover, or your ‘sum assured,’ as it’s called. How do you do this? While it’s simply a matter of contacting your life insurance provider and letting them walk you through this process, we also suggest that you first chat to your financial adviser to assess how much life insurance you need. 

Speak to the professionals

Very few of us wants to spend time and energy considering our own mortality, but it has to be done so that we can take care of our loved ones with sufficient financial support. We trust that this information will prove helpful, and while we’re discussing ways to look after your family, you may want to look into getting a Will drawn up by the professionals at Capital Legacy for free.

Getting a Will done by a professional doesn’t have to cost you! Click here to get a free Will drawn up today.