The average American household has enough life insurance coverage to replace 35 months of income. Assuming your family is somewhere near the average, consider how much just one major life change could affect that time period. For instance, the cost of raising a child or owning a larger home could dramatically shorten the amount of time a death benefit would last. If you have experienced these or other significant changes recently, take the time to review your life insurance policies.

Insuring Common Changes to Lives

The birth of a child can be a time of tremendous change. Daily routines give way to new ones. Priorities are reordered. Household budgets are revised. But it’s also an important time to consider your insurance needs. In the absence of a key provider, would the family still be able to afford adequate shelter and medical care? Will the children be able to go to a good college? A two-parent family earning $38,000 to $64,000 a year is estimated to spend about $165,000 to raise one child to age 18. And a family earning more than $64,000 can expect to spend more than $240,000 per child.

Buying a new home, whether it’s to make room for a new family member or to reward a career advancement, can also trigger a life insurance review. A home can be a source of comfort and fond memories during trying times. If the unforeseen were to happen, would your current death benefit be enough to cover the new mortgage? Would your family be able to afford the additional upkeep most houses require as they age?

Review and Research Life Insurance Needs

Estimating the appropriate amount of life insurance for you can be a difficult task. Reviewing your life insurance policies on a regular basis — and whenever life-changing events take place — can go a long way toward protecting your family.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Remember, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable by having the policy approved.