Life insurance is one of the best investments you can possibly make. It provides your loved ones with financial security when you pass away, and offers you peace of mind knowing that your debts, final expenses, and dependents will be taken care of.
If you’ve recently invested in life insurance policy, however, and you’ve suddenly realized that you didn’t purchase enough coverage, you’re probably wondering if you can add more to your existing policy. First, take comfort in knowing that you aren’t the only person who hasn’t purchased enough coverage; second, read on to find out more about adding more coverage to your life insurance policy.
How to Decide if You Need More Coverage
So, you purchased a life insurance policy that offers, let’s say, $500,000 in coverage. And now, on second thought, you’re wondering if that coverage is enough to actually protect your loved ones financially and pay off your debts and cover the cost of your funeral expenses.
It happens! A lot of people miscalculate the amount of coverage that they need. If you’re thinking that you didn’t invest in enough coverage, speak to a reputable insurance agent or a financial advisor. Together, you can determine if the coverage you already have is enough, or if investing in more coverage is a wise idea.
How to Add More Coverage to Your Life Insurance Policy?
Contact your life insurance provider and let them know that you want to add more coverage to your policy. Most carriers will permit you to add more coverage; however it really depends on your provider and how long your policy has been “in force” (how long your policy has been effective). Typically, the policy will have to be effective for less than 6 months.
If you can add more coverage, your life insurance company will ask you a few questions; just like they did when you applied for your policy initially. You’ll be asked about your health and whether or not it has changed significantly. If your health has taken a turn for the worse, you may not be able to add to your coverage; however, that really depends on your provider.
You’ll Need to Qualify
If your carrier does allow you to add to your coverage, before you do, you’ll first have to qualify financially for the increased amount of coverage that you want to add to your policy. Life insurance companies take into consideration the collective amount all of the life insurance policies that you carry; also, there will be limits, and those limits are based on your age and the amount of money you make.
Your Premiums Will Increase
If you are able to extend the coverage on your existing life insurance policy, it’s important to note that your premiums will increase. Knowing this is important because you want to make sure that you can afford your coverage. Life insurance premiums are an expense that you will have to pay for the rest of your life. With that said, you definitely don’t want to commit to paying for something that you won’t be able to afford later one. If it ends up that you can’t afford your premiums, your life insurance coverage will lapse, and your loved ones could end up being put into a serious financial situation if you pass away. Plus, if you’re still living and your policy lapses, it’s likely that you won’t get your premiums back.
What if You Can’t Add to Your Existing Policy?
What happens if you need to add more coverage but you can’t add on to your existing life insurance policy? Do you just have to accept that your policy won’t offer enough coverage when you do pass away? Nope.
Let’s say that you want to add more coverage to a policy that you’ve had for more than a year and your health has deteriorated. In this type of situation, there is a chance that your carrier will not allow you to add on to your existing policy. However, that doesn’t mean that you can’t get more coverage. You could apply for another life insurance policy.
You are permitted to carry more than one life insurance policy; and, you can carry policies from different insurers. So, if you aren’t able to add more coverage to the policy you already carry, you might want to consider taking out a new policy. You can either consult with the company that carries your current policy, or you could speak to another insurance provider.
Is Adding More Coverage a Good Idea?
The answer to that question really depends on your unique circumstances. If you don’t think that you have enough coverage on the policy that you already have and adding more coverage – or investing in a new policy – makes sense financially, than yes, getting more coverage is a good idea.