Quiz: How likely are you to buy life insurance this year?

How do you know when it’s time to buy life insurance? That’s easy: If someone else depends on you financially, you need to get covered. That way, if something happens to you, your coverage can provide money to help them carry on. 

Of course, people buy life insurance for a variety of reasons. Some of the most common are to help your family replace lost income, to cover your end-of-life expenses, and to leave something behind for the next generation. That said, a recent LIMRA industry survey of 5,500 U.S. households found there are a number of key milestones that can prompt people to shop for coverage. These include everything from buying a house to the death of a loved one. And while not all life events are created equal, research shows the more of these milestones you hit, the more likely you are to buy life insurance.

If you’ve had a significant life event in the past few years, it might be time for you to buy or increase your coverage. Take this quiz to help assess your needs.

1. Did you recently have a baby or adopt a child?  Research shows that new parents are twice as likely to buy life insurance. More people in your home means more mouths to feed, more schools to pay for, and even higher debts to pay down, so you want to make sure your life insurance matches your financial needs. Here’s why moms and dads need coverage.
2. Did you get married in the last two years?  While a lot of people see having a baby as the benchmark for buying life insurance, research shows that people are just as likely to get coverage right after they get married. This makes perfect sense. After all, now that you’re responsible for the well-being of another person, you may want to make sure they’re covered financially if something happens to you.
3. Did you recently lose your job? No surprise that this is the single biggest trigger for buying life insurance. In fact, people are 2.5 times more likely to buy coverage when they’re out of work. Losing your job can leave you financially vulnerable, and people see life insurance as a way to gain some control over their financial future. When you leave a job, you also typically lose your group life insurance coverage – all the more reason to want to add a layer of financial protection. If you’re newly unemployed or watching your money, term life insurance is often the best way to go. It’s an affordable way to protect your family for a set period of time and is typically less expensive than permanent or whole life insurance policies. 
4. Did you start a business in the last two years? People who are starting a business are twice as likely to buy life insurance. In fact, nearly one in five of those surveyed said it was a requirement for their new role. When you own a business, it’s not just your family depending on you, it’s also your business partners and employees. Life insurance is a way to ensure that, if something happens to you, any debts associated with your business are covered.
5. Did you recently receive an inheritance? When you come into money, it’s always a good idea to put some aside for financial protection. One smart way to do that is with life insurance. That’s why research shows that people are 1.75 times more likely to buy coverage after they inherit. And because term life premiums are relatively affordable, you can gain the protection you need for your family and likely still have some of your windfall left over to pass on to your kids.
6. Are you recently retired? If you’re retired, you probably no longer have life insurance from your former employer. That’s one reason retirees are 1.5 times more likely to buy coverage, particularly if they’re still paying off a mortgage or have a financially dependent spouse. When you’re no longer earning, life insurance can provide you with a financial cushion if you need it. In the survey, 45% of respondents said they bought life insurance to supplement their retirement income. 
7. Have you recently bought a house? If you’re a new homeowner, you probably have a mortgage to pay now – and you need to make sure you have the money to do it. That’s why people who buy a home are 1.5 times more likely to buy life insurance. Buying or increasing your coverage can help ensure your family will be able to handle the mortgage payments if something unexpected happens to you.
8. Did you recently lose a loved one? If you’ve recently lost a member of your family, you know the toll it takes both emotionally and financially. Research shows that after the death of a loved one, people buy life insurance 1.5 times more often. This is most likely because they’ve seen the high cost of end-of-life expenses firsthand and want to protect their family. The benefits from your policy can provide your family members with much-needed money to take care of funeral costs, settle your affairs, and pay for day-to-day expenses.

 

How Did You Score?

If you’ve gone through at least one of these life events in the past two years, it’s time to consider life insurance. In fact, people with similar experiences are 1.5 to 2.5 times more likely to buy coverage. And with two or more of these events, the likelihood increases even more – because there’s even more reason to buy. The bottom line: When you have significant changes in your life, it often gets you thinking about how to protect the future of those who matter most. Find out how life insurance can help.

 

This blog is based on findings published by LIMRA in its November 2018 report, “Drivers of Life Insurance Behavior.” LIMRA collected the data in its Individual Life Insurance Consumer Survey conducted in 2017.

At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.