5 Life Events That Happen When You Will Need Life Insurance The Most

Posted by Jessica Weis on Jan 4, 2022 3:30:00 PM

We all encounter changes in our lives, and with the start of the new year, we start thinking about what lies ahead for us. Some of these changes are exciting, and we have time to prepare for them, but some can take us by surprise. People lean on life insurance as a valuable tool to help plan for these situations before they occur and sometimes after. This article goes over five critical events in life where life insurance can come in handy and when it can be beneficial to add to your coverage.

Starting A New Job

Many jobs offer low-cost or even free life insurance via a group benefits plan. However, companies will most likely only offer one or two times your annual salary. Financial professionals recommend having life coverage at least five to ten times your yearly income. The amount of coverage you need can depend on the size of your family and their financial needs. It's important to know this concept immediately when you start your job, so you can start planning how much you would like to contribute. Though one thing to keep in mind is that workplace policies are job dependent. In other words, if you leave the company, your coverage will end, which is why it's a great idea to buy additional coverage outside of your company’s plan. This additional coverage can secure you with financial protection, no matter what happens with your job.


If you work in a high-risk environment such as construction, aviation, or firefighting, you should consider increasing your coverage. This way, if you pass away while on the job, your family will have financial security.


Additionally, suppose you own a business or are thinking about starting a business. You'll want to think about having enough life insurance so that your heirs are able to take over the business if necessary.

Average annual income graphic

Buying A Home

Buying a home is a significant milestone for many people. If you have purchased a home before, you most likely took out a mortgage. Paying off a mortgage is one of the top reasons people buy life insurance. If you bought a house with someone else and you pass away, the living partner would be in charge of covering the mortgage costs. If you bought a home by yourself, your beneficiaries would have to cover the outstanding debt. This event could leave your loved ones in a stressful financial situation. Life insurance can help save your family from this financial burden. Your policy can help pay off the house, thereby keeping your family in the home they love.


Getting Married

Getting married means sharing your life with someone, but it can also mean sharing your finances with someone. In most situations, both spouses work and contribute to the household income. Married couples make the mistake of thinking that they don't need life insurance if they don't have children. But this is furthest from the truth. Losing half of a household's income could leave the surviving spouse struggling to pay the bills on their own. In fact, LIMRA reported that 7 out of 10 households said they would struggle to cover everyday living expenses if the breadwinner of the household passed away. Equally devastating would be losing a stay-at-home spouse because their contribution would need to be replaced through housekeeping help. Replacing the work of a stay-at-home parent can cost more than $178,201 per year. Life insurance can provide a financial safety net to cover monthly expenses and the lost income.


Having Children

Most people don't realize the importance of life insurance until they are holding their child in their arms for the first time. The typical American family spends more than $233,000 raising a child from birth to age 18. Becoming a parent is expensive, and we all want what’s best for our children. We also want to make sure that our children are taken care of, even when we are gone. This is when life insurance can lend a helping hand.


Starting a family is a great time to reevaluate life insurance coverage or consider adding additional coverage. This coverage can help cover daycare costs or help save for a college education. The 2021 average cost of college in the US is $35,720 per student per year. Once your child is financially independent, you can choose to reduce your coverage back down.


Average cost of tuition 35,000 dollars


The goal of retirement is to enjoy life stress-free after a long life of hard work. However, millions of Americans are afraid of outliving their retirement savings. Life expectancy is on the rise, so our retirement savings might not be enough. Life insurance could be a great backup option if this were to happen. If you run out of retirement savings, your policy's cash value may be available to help supplement income for your retirement.

ELCO Mutual offers multiple life insurance options and we are here to make sure that you purchase the policy that’s best suited for your needs. For the past 75 years, we have offered our policyholders personalized service with all your calls answered by a live person. We are in business to provide you with financial stability and give you confidence that we will protect your policy. For more information on life insurance, please subscribe to our blog.


Topics: Life Insurance, Term Insurance, Whole Life Insurance, Final Expense, Retirement