April 20, 2022

How Major Life Events Affect Your Life Insurance Needs

We all experience major life events in our lifetime, such as getting married, having children, changing jobs, buying a new home, getting divorced, retiring, and more. These events tend to shift everything in our lives, including our financial situations and our need for life insurance. Let’s explore some of the major life events you may encounter and how each of them impacts your need for financial protection.

Marriage or Partnerships

Life insurance often becomes more important when you get married or find a life partner. When someone else depends on your income to help pay for expenses like rent, mortgage, car payments, and other bills, they may face financial hardship if something happens to you.

Here’s a helpful exercise: 1) Add up your combined monthly or annual living expenses. 2) Determine which expenses would remain if your partner passed away. 3) Compare your remaining expenses to your income. Would you have enough to cover your expenses and have some money left over for savings? If you find that you’re falling a little short, you need to strongly consider purchasing a life insurance policy that insures your spouse’s or partner’s life. You can also use our handy life insurance calculator to determine your life insurance needs.

Having or Adopting Children

Having or adopting a child increases your overall expenses, which means if something happens to you or your partner, a more significant financial burden falls on those left behind to care for your child. Think diapers, clothing, daycare, food, etc. Raising a child to age eighteen costs $233,610 on average in the US, according to a 2015 USDA report.* Could your partner still cover all of your expenses and support your child if your income goes away? If you or your partner currently cares for your children, consider that you would have to begin paying for childcare. The cost of childcare ranges depending on your location and other factors, but it can put you back more than $10,000 per year per child.** Life insurance can help your partner and children maintain a comfortable lifestyle if something happens to you.

New Job or Promotion

Getting a new job or promotion is an exciting life change, and it may mean that your style of living improves. Your new job may lead you to buy a new car or a new home, but here’s the thing: as your income increases, your expenses tend to increase as well. Higher expenses or debt can result in your family facing a more significant financial burden if you or your partner passes away. For this reason, we recommend that you reassess your life insurance needs when you have a substantial change in household income.

If you change jobs and move to another company, are you losing or gaining life insurance coverage through your employer? Many employers offer free or low-cost life insurance plans to their employees. If you move jobs, you may lose this coverage. Make sure you ask your new employer about any life insurance offered to you. Typically, it’s smart to take advantage of any life insurance benefits provided. You can include employer-sponsored coverage in your overall life insurance plan, but you must consider that if you lose your job, you may lose that life insurance protection as well.

Buying a Home

Buying a home may also increase your need for life insurance. If you’re taking on a new mortgage loan or trading for a larger one, you should consider covering that debt with a life insurance policy. Sources vary, but the average monthly mortgage payment in the United States currently falls between $1,100 and $1,600. Suppose you have a life insurance policy that matches or exceeds your home loan amount. In that case, the surviving partner will have the option to use the proceeds from the life insurance to pay off your home loan, removing a considerable monthly expense. Eliminating a mortgage payment can prevent your family from being forced to move. When a family loses a parent, staying in a home full of memories can provide stability and comfort during a difficult time.


Divorce is a major life event that can affect every part of your life, including your life insurance needs. According to the CDC, in the United States, more than 746,000 people got a divorce in 2019. Divorce is a relatively common occurrence, and it is an opportunity to review your financial situation.

Every circumstance is different, but there are two main things you should think about if you’re going through a divorce. The first is to review the beneficiaries on any life insurance policies you own (to ensure the proceeds go to the right people). The second is to buy a life insurance policy insuring your ex-spouse if you plan to receive financial support after the divorce (e.g., alimony payments, child support payments, or future retirement funds). Your ex-spouse will need to consent to the life insurance policy, which will help protect the assets described above.

Children Leaving the Home

That day will come when your chicks have “flown the coop.” If you are no longer providing financial support to your children, your expenses will decrease considerably, and you may be able to reduce your life insurance coverage.

Some parents, however, want to assist with large expenses as their children move through the early stages of adulthood, including college tuition, weddings, or a down payment on a first home. In these cases, life insurance that provides funds to your children in the event of your death can provide the same level of support.


Retirement impacts our finances in a big way. Hopefully, when you get closer to retirement, you’ve already spent decades saving for the day when you finally get to hang up your work boots. As you approach retirement, you’ll need to adjust your investment strategies, modify your budget, and plan for what’s ahead. This planning process often involves purchasing life insurance to cover your final expenses (i.e., funeral costs, medical costs, etc.). It can also include purchasing annuities, which provide a guaranteed income stream and unique options and features. You may also choose to reduce your life insurance coverage if you no longer need the same level of protection and want to lower your expenses. Every retirement situation is unique, so it’s critical to have professionals guide you through the planning process.


BetterLife is a different kind of life insurance company. Schedule an appointment with one of our expert agents to learn more about what makes us different and why you should become a member today!