Life insurance is very important if you have relatives or just loved ones that you want to be taken care of after you die. This coverage helps make sure that your family doesn’t lose valuable things after you die because of your lost income.

But how much is enough life insurance? The right answer to that question is very important because it can change a lot over the course of your life.

If the following are true about your life insurance:

1. The only health insurance you have is through your job.

It’s better to have some life insurance than none at all, but if your only coverage comes from your job, it might not be enough. Plans like these usually only cover a year’s worth of your salary, maybe even two. This probably won’t be enough to meet your family’s needs if you have a lot of debt or want to help pay for your kids’ college education.

Life insurance through your employer is also generally conditional on you keeping that job. This means that if you quit for any reason, the coverage ends.

Lastly, when you buy an individual coverage, you can choose from different types of life insurance, such as permanent life insurance, which gives you benefits that you can use while you’re still alive.

2. Your income went up.

Getting a raise is usually a good thing, but if your income is much higher now than it was when you first bought life insurance, you might not have enough coverage. When you make more money, you usually have to make changes to how you live. If you suddenly leave, your family and friends probably won’t want to learn how to live on less.

3. The person who stays at home with you doesn’t have life insurance.

If the person who stays at home with the kids doesn’t already have life insurance, you might want to get them one. Although they don’t make enough money to be paid for, they do important things like care for children that would need to be paid for if they weren’t there.

Watch the Virgen family’s “Real Life Story” to see how important life insurance was for them. They were lucky that Teresa, the stay-at-home mom, had it. They are sure that they would have lost their home without the insurance.

4. You had a kid.
Every parent knows that having a child costs a lot. In fact, in 2023, the average cost of raising a kid was more than $21,000 per year. (And that doesn’t even count college!)

So, if you’re a new parent or have added a kid to your family, now is a good time to look over your life insurance and make sure you have enough to cover your dependents’ long-term needs, like food, shelter, and schooling, until they turn 18. With the high cost of child care and the unstable financial situation of a single parent who doesn’t have enough life insurance, having even one child can make your needs for life insurance much greater.

5. You secured a fresh home.

Paying the mortgage is one of the most important things a family has to do with their money, and it’s even more important for someone who just lost a spouse. Since you first got your life insurance, if you bought a new house, you may need more coverage to help make sure your family can pay off the debt. In the end, moving is never fun, especially after a terrible loss.

Understanding how much life insurance you need can be hard as your finances change, but you can make sure you’re properly covered. You can use Life Happens’ Life Insurance Needs Calculator to get a good idea of how much coverage you need. A half-hour of work today can lead to years of stable finances down the road.

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