Life insurance is a risk-management tool that pays a financial benefit if the policyholder should die while it is in effect. However, it is not an instrument that you can get and then forget. You should adjust coverage depending on changing circumstances. Below are a few instances when you should consider updating your policy.

When Should You Update Life Insurance Coverage?

1. Marriage or Divorce

If you marry or divorce someone, you should reexamine your coverage needs. For instance, you may need to purchase additional coverage to support a dependent spouse or remove your ex as the beneficiary of your policy. Even if both spouses work, you likely depend on both salaries to cover expenses. Therefore, the loss of one income due to an unexpected death could leave the survivor struggling to pay all the bills. A life insurance policy would lessen the burden.

2. Birth of a Child

Between food, clothing, toys, and incidentals, the average cost to raise a child to age 18 is over $230,000, so you should update your coverage after each new child. Note that the above amount does not include the cost of higher education. If you intend to help pay for your kids to attend college, you should factor in the cost of that when designing a policy, as well. 

3. Starting a Business

If you are a business owner or principal and die, it will put the company on shaky ground. The organization loses your experience, expertise, and contacts, and it could cost a considerable amount to find someone new. Moreover, death may require surviving partners to buy out shares from your survivors. If the business does not have enough cash on hand, it could require dissolution of the company. A life insurance policy helps your business navigate these obstacles.

To have an experienced life insurance agent help you design a policy, contact Farmers Insurance - Andrew Chao in St. Louis, MO. Andrew is a Toppers Club award winner who serves clients in and around St. Louis County. He and his team also specialize in auto, business, and homeowners insurance. Visit his Facebook to learn more about your options or call (314) 300-7690 to request a life insurance quote.