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When you should review your life insurance needs

G12DNF-alamy-rf Is your child going off to college? That's a good time for a life insurance checkup. | Photo by Alamy Stock Photo

These five midlife milestones can affect your insurance needs.

Significant life events that typically happen in our 20s and 30s—getting married, buying a house, and having children—require us to make major adjustments in our auto, home, and life insurance. After we pass those milestones, however, we tend to put our policies on autopilot. Once we’ve settled into middle age, we may forget that shifts in our home and work lives can also have implications for our insurance coverage.

To help you ensure you’re adequately covered, here’s a rundown of a few life events that may occur in your 40s and beyond that should prompt you to contact your insurance agent.

  • You renovate your home. Even small changes can necessitate adjustments to your homeowners insurance. If, for instance, you renovate your kitchen or bathrooms with high-end countertops or appliances, you’ll probably need to increase your coverage in order to replace those items if necessary. Of course, when you undertake major renovations, such as adding square footage or a swimming pool, a policy review becomes even more important.
  • You get a raise or a new, higher-paying job. As your income rises, your checking, savings, and investment accounts will likely also increase. To protect those growing assets, you might want to consider raising the limits on your liability coverage, as well as purchasing an umbrella policy. An umbrella policy provides additional insurance protection on top of your auto and home or renters insurance liability limits.
  • You inherit or buy high-value items. Most homeowners and renters policies limit coverage for jewelry, art, antiques, silver, collectibles, technology, and home office equipment. If you inherit or buy an especially valuable item in one of these categories, talk to your agent about adding an endorsement to your policy to provide additional protection.
  • Your child starts to drive or goes off to college. When your children begin driving, you’ll likely add them to your auto insurance. Although that might cause your premiums to go up, at least temporarily, you could be eligible for discounts, such as the one most insurers offer to good students. And be sure to tell your agent if your child goes away to college without a car because it could mean a premium reduction.
  • You retire from your job. This major milestone can have a positive effect on your auto policy: Your rate is tied to your annual mileage, so your premium could go down if you no longer have a long commute. With regard to life insurance, it’s important to review your policies and overall plan when you retire because your personal circumstances might have changed from the time you first made the purchase.
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