How to Increase Life Insurance Coverage
June 23, 2021 | Tom Peterson
Has your life changed since you took out your life insurance policy? It’s very common. Perhaps you were newly married when you first signed up for insurance. Now you’re in a new home with a baby on the way. Or maybe you’ve divorced and taken on some additional debt. Whatever your circumstances, it’s important to adjust your life insurance coverage with any new life circumstances or events. If you don’t, your beneficiaries might not be adequately protected after your death.
Reasons to Add Life Insurance Coverage
There are many reasons to buy additional life insurance coverage. A few of the most common:
- Marriage or divorce
- The birth or adoption of a child or grandchild
- Buying a home or refinancing a mortgage
- Taking out or co-signing on a loan
How to Increase Insurance Coverage
Generally, there are two options for adding life insurance coverage.
Purchasing a new policy
A new life insurance policy can either replace your existing plan or be stacked on top of it. You will probably have to go through underwriting again, and premiums may be higher. But you’ll have peace of mind, knowing that your family is covered should the worst happen.
Converting a term life insurance policy to a whole life insurance policy
When you convert a term policy to a whole or permanent policy, the coverage amount won’t increase, but the length of the term will. As the name implies, whole life insurance policies last for your whole life. You may be able to purchase a term conversion rider, which will convert your term policy to a permanent policy at the end of the term. Contact us to learn more.