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About 54% of people in America have life insurance.1 And if you’re one of them, it’s easy to assume that your loved ones will be provided for if something happens to you.

Unfortunately, about 60 million households are currently underinsured when it comes to the life insurance protection their families need.2

It’s important to remember that our life insurance needs continue to change with our changing lives, and that regular reviews can help protect against being underinsured in life insurance. The following is a list of signs that you may be due for a review.

1. You have life insurance only through your employer.

The group policies offered through your employer can be a convenient way to get some affordable coverage. But they typically cover only one to two times your annual salary.

If you’re the primary wage earner for your family, this might not be enough to cover all of the expenses your loved ones have. In fact, LIMRA notes that households with only group life insurance have an average coverage gap of $225,000.3 Also, policies through your employer are not typically portable. So if you change employers or lose your job, you’ll lose your coverage.

If you think you may need additional coverage, there are tools to help you determine what type of life insurance is right for you.

2. You picked an amount without calculating your needs.

The death benefit provided by life insurance can sound large until you calculate the expenses your loved ones will have. Paying the mortgage and existing debts, funding college expenses and even paying for child care can quickly deplete even a sizable amount of savings or life insurance benefit.

That’s why it’s so important to use a life insurance calculator to determine your actual needs.

3. You have a new addition to your family.

Getting married or expanding your family are both excellent times to reexamine your life insurance needs. The more people who depend on you financially, the more need you’ll have for additional coverage.

And if you have plans for the future that you’d like to help them achieve — such as funding a college education or retirement or paying for wedding expenses — then consider factoring these costs into your life insurance coverage, as well.

4. You bought a new home.

Your home is more than just a house. If something were to happen to you, being able to remain in the home they love could ease some of the stress and heartache your loved ones have to face. That’s why it’s so important to make sure your life insurance coverage includes the outstanding balance on your mortgage.

5. Your income has increased or your lifestyle has changed.

Another good time to review your life insurance coverage is when you receive a raise or promotion. Your loved ones will quickly grow to depend on your additional income and may need the increased benefits to cover their changing needs.

6. It’s been several years since your last review.

This last sign is one of the easiest ways to know whether you need to review your life insurance coverage. If it’s been a while since your last review — even if you don’t think much has changed — it’s probably time to take another look.

Are you due for a review?

Having the right amount and type of life insurance is just as important as having coverage to begin with. Make sure the protection you have is enough to help the people you love thrive — not just survive — if something happens to you.

[1] “2020 Insurance Barometer Study,” James T. Scanlon, M.S., HIA; Maggie Leyes; Stephen Wood, LIMRA (May 22, 2020).
[2] “Industry Associations Unite to Help Address the Life Insurance Coverage Gap in the United States,” LIMRA Research (February 1, 2021).
[3] “Maximizing the Potential of the Underinsured U.S. Life Insurance Market,” LIMRA (January 31, 2017).
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