When you first purchased your life insurance policy, you chose a policy amount that worked at the time. However, your life circumstances and needs may have changed. Here's how you can increase your life insurance coverage.
Figure Out the Increase You Need
Marriage, children, a house and a new job all affect the amount of life insurance you need. Perform a needs analysis with your insurance agent as you determine exactly how much of a life insurance increase you need. It includes a list of categories that walks you through your financial needs and helps you determine the amount of coverage you need to cover final expenses, provide financial support for your family and repay debt.
Add Coverage to Your Employer-Sponsored Policy
Many employers offer free life insurance to employees. Ask your Human Resources manager if you can boost your policy value. Since you already hold a policy, you may not need to fill out additional paperwork or take a medical exam to get more coverage.
Increase Coverage on Your Personal Policy
Because employer-sponsored life insurance policies are often small, you may have purchased a personal policy through a commercial carrier. Contact the agent about increasing your policy amount. You may need to pay a fee for additional coverage, but the peace of mind is worth the investment.
Purchase Another Policy
A second life insurance policy may provide the additional coverage you need. It covers the gap between the coverage you already have and the amount you need. Purchase a second policy from a different carrier than your original policy. While you have to disclose that you already own life insurance, you will have additional coverage for your family and needs.
Things to Consider
When you want to increase your life insurance, remember three tips.
- Research your options. No matter what type of coverage you currently own, a term, whole life, universal, indexed or variable policy may be best the best type for your needs now. Remember to compare policies from different companies, too, as you get the most coverage for your money.
- Check your budget. Because your policy will lapse if you don't pay the premiums, be sure you can afford the extra insurance costs.
- Prepare for the underwriting process. Potential insurance companies will ask for details about your health, finances, occupation and other factors. These factors affect your life expectancy and insurability, so always tell the truth as you prepare to answer these questions.
You can add coverage to your existing life insurance policy in several ways. Talk to your agent as you purchase the right coverage for your needs.