By now, you probably know that the best time to purchase term life happens when you're young and healthy. That's because, in all probability, you'll secure a nice low rate for that entirety of your term – and, of course, you'll get the peace of mind that comes from knowing you're covered and your loved ones is financially protected.
That said, things can alter. Maybe you purchased a 30-year term when you were 25 and childless, and ten years later you're married, earning a significantly larger income (while paying a mortgage on a home), and raising a brood of a half-dozen kids. (Hey, it could happen.) In that case, the coverage you purchased 10 years ago probably would not be enough to deal with your loved ones when the unexpected happen.
If you need additional insurance policy – whether it's due to changes to your finances, your marital situation, your raising-a-family situation, or anything else – this is what you should know.
Why you might need additional insurance coverage
As you learned in our (only somewhat exaggerated) example above, there are a number of reasons you will need more term life insurance coverage than you currently have. Remember, your term life insurance policy pays out a death help to your loved ones (also known as beneficiaries) in the event that you die before the end of the term. This cash benefit can be used as everything from burial expenses to mortgage payments to education costs and even medical payments. In case your financial needs have significantly increased since you first purchased a policy, you might need additional insurance coverage.
Some reasons why your requirements might now exceed your coverage include:
Having a new baby.
A child means more love in your house, obviously, but it also means additional expenses, from clothes and food to education costs in the future. If you didn't arrange for these expenses when having your current policy, you might need supplemental insurance.
A new job and/or an increase in salary.
Hey, you are making more income! Approach to take with that well deserved raise, promotion or lottery win. But along with a bigger income often comes bigger expenses (new house, second car, robot butler, etc). Point is, you might want more term life insurance coverage if the loved ones are suddenly left without your newer, larger income for support.
A new home.
Life insurance and a mortgage have a tendency to go hand-in-hand. That's because both of them are long-term financial commitments. With a mortgage, you're agreeing to pay your lender a set amount of money on the decade or three. With term life insurance, you're agreeing to coverage that will help cover expenses, including mortgage repayments, over a similar time period. The reality is that you simply wouldn't wish to leave all your family members responsible for paying a home loan that exceeds your overall term life coverage amount.
You're concerned about long-term care.
It may be for a child, for an aging parent, a sibling, or even for yourself. If you've were built with a sudden uptick in long-term medical expenses associated with a household member's ongoing illness or medical problem, you might want to consider additional coverage. (Note: If you're the one experiencing an ongoing illness or medical problem, this may affect your ability to get additional coverage, and potentially what you'll purchase that coverage if you're able to get it.)
Your partner is no longer working.
If you are in a relationship where both partners are working, you most likely split your lifetime insurance policy accordingly. If this is no more the situation – say, if a person of you is now staying the place to find raise a child – you may need a supplemental term life insurance plan that factors within the price of child care.
Choosing the right amount of additional coverage
As for determining just how much additional coverage you'll need, and just how long of a term you should apply for, the old guideline is still effective, albeit having a key caveat. You still want enough coverage for roughly five to Ten times your salary. But you may also subtract your current coverage amount from that figure to find out just how much additional coverage you actually need.
For example, in case your new coverage needs equate to $1 million, but you actually have a $500,000 policy, you will want to make an application for another $500,000 in coverage to create up the difference. You can start the application process in your Haven Life account center, which is also where you'll eventually manage both policies (including payments). Just note when applying for a second policy, you can only carry up to $3 million as a whole coverage (if approved).
You might be wondering: why obtain a supplemental insurance policy instead of cancelling your existing one? Well, keep in kind the rate you're currently spending money on your coverage is based on how old you are and health at the time of applying. You're older now (sorry to remind you), so re-applying for $1 million in new coverage would likely be more costly than trying to get $500,000 in new coverage to add to your existing $500,000 policy. Long story short: it'll be cheaper in the long run to obtain a new policy only for the additional amount you need. This really is one good reason why Haven Life doesn't support policies that are purchased for the purpose of replacing existing coverage.
Phew. This is a lot. Still wondering just how much additional term life insurance coverage you will need? A car loan calculator might come in handy, or simply take a look preview of the items you may count on paying for such a policy if you're a non-smoker in excellent health.
Quotes for term life insurance
Applying for additional coverage
Remember our easy online application, where you truthfully provided us with answers to a few important questions regarding your age, your wellbeing, as well as your coverage needs? Obviously you do. That's the power of simplicity. Well, prepare to get it done again since you will need to re-apply to obtain additional coverage.
While a few of the particulars will have changed, the overall idea continues to be same. Provide us with the unvarnished truth when answering a few key questions, and we'll review your application as soon as possible. You'll be treated just like a new applicant throughout this method. For the majority of people (even people who were approved for InstantTerm previous), that means you'll need a medical exam, which you'll conveniently agenda for the time and put of your choosing. If you've experienced an exam before, you realize it's nothing to hesitate of – less fun than binge-watching your favorite display on the couch, sure, but almost as easy and it typically takes just Twenty to thirty minutes to accomplish.
To be clear, this is an application, so there is really a chance you might not be accepted for further coverage. Should you curently have $3 million in Haven Term coverage, our maximum, you won't qualify for another policy. If you have created a chronic illness since purchasing the first policy, you will possibly not be approved. So if you feel within 90 days of your first policy, Haven Life will instead assist you to add coverage to that policy.
All told, getting another policy is a superb method to make sure you have the coverage you and your family require. If you've experienced a milestone in recent months or years, congratulations. And if that milestone – an infant, a brand new house, or perhaps a job – means you'll need another life insurance coverage, we're honored that you might consider us for this. Making life less hard is within our DNA, and this is one of the ways we are able to do exactly that.
Ready to start? Log in to your account page to see if you're eligible for a second policy. If that's the case, you are able to apply right then and there.