Should You Add More Life Insurance in 2023?

The start of a new year is a good time to consider life insurance coverage needs.

Buying life insurance is a crucial part of financial planning. Without coverage, an untimely death could leave surviving loved ones struggling to pay basic bills or stay in a family home.

Some people assume buying life insurance coverage is a one-and-done prospect. But that's not necessarily the case. In fact, it's a good idea to periodically review whether there's a sufficient amount of insurance in place. And the start of a new year is a good time to do that.

So, as the beginning of 2023 approaches, consider these issues to decide whether the purchase of more life insurance coverage is in order.

Have life circumstances changed?

The biggest thing to consider when deciding whether to buy life insurance coverage is whether circumstances have changed and more money would be needed to provide for loved ones in the case of an untimely death.

There are many different ways that life changes could necessitate more life insurance coverage. For example, it may be necessary to buy more protection if:

• A new family member has entered your family. For example, the birth or adoption of a new child or grandchild could mean more money is needed. Additional funds may be necessary to pay for their education or to make sure they can receive crucial financial support into adulthood.
• Loved ones have developed new health issues. If a policyholder is now serving as a caregiver for aging parents, or a loved one has become disabled and would need ongoing care, buying more coverage could be important to pay for that in case the policyholder passes and can't continue to provide funds or support.
• New property (or debt) has been acquired. The purchase of a new home, for example, could mean more life insurance is needed to pay off the mortgage if the policyholder dies but surviving family members want to keep the house.
• Income has gone up. Peoples' lifestyles tend to change as their income increases. If a policyholder gets a big salary bump and makes new commitments, or family members get used to a new standard of living, it makes sense to get additional coverage to replace that higher income in case of a death.

There may be other changes that warrant the purchase of more coverage as well. The key thing is for each policyholder to assess their own circumstances to see if new needs have arisen.

Is buying more coverage a possibility?

It's also important to find out if buying new coverage could even be possible. In most cases, it is feasible to increase a death benefit amount or even buy an extra policy. But this isn't always the case. If pre-existing conditions have developed or the policyholder has gotten much older or less healthy, then buying more protection may not even be an option.

It can still be worth reaching out to an insurer to find out whether adding on more life insurance is an option. But, it's important to be aware this may be an obstacle in some circumstances -- which is why it's best to consider future needs when buying insurance in the first place.