How to increase your life insurance coverage

By now, you probably know that the best time to buy term life insurance is when you’re young and healthy. That’s because, in all likelihood, you’ll lock in a nice low rate for the entirety of your term — and, of course, you’ll get the peace of mind that comes from knowing you’re covered and your family is financially protected.

That said, things can change. Maybe you bought 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 new house), and raising a brood of a half-dozen kids. (Hey, it could happen.) If that’s the case, the coverage you purchased 10 years ago probably wouldn’t be enough to take care of your loved ones in the event that the unexpected should happen.

If you need additional insurance coverage — whether it’s because of changes to your financial situation, your marital situation, your raising-a-family situation, or something else — here’s what you need to know.

Why you might need additional insurance coverage

As you learned in our (only somewhat exaggerated) example above, there are a handful of reasons you might need more term life insurance coverage than you currently have. As a reminder, your term life insurance policy pays out a death benefit to your loved ones (also known as beneficiaries) in the event that you die before the end of your term. This cash benefit can be used for everything from burial expenses to mortgage payments to education costs and even medical payments. If your financial needs have significantly increased since you first bought a policy, you might need additional life insurance coverage.

Some reasons why your needs might now exceed your coverage include:

Having a new baby.

A child means more love in your house, of course, but it also means additional expenses, from clothes and food to education costs down the road. If you didn’t plan for these expenses when getting your current policy, you might need supplemental insurance.

A new job and/or an increase in salary.

Hey, you’re making more money! Way to go on that well deserved raise, promotion or lottery win. But along with a bigger income often comes bigger expenses (new home, second car, robot butler, etc). Point is, you might want more term life insurance coverage in case your loved ones are suddenly left without your newer, larger income for support.

A new home.

Life insurance and a mortgage tend to go hand-in-hand. That’s because both are long-term financial commitments. With a mortgage, you’re agreeing to pay your lender a set amount of money over a decade or three. With term life insurance, you’re agreeing to coverage that will help cover expenses, including mortgage payments, over a similar period of time. Suffice it to say that you wouldn’t want to leave your loved ones on the hook for paying a mortgage that exceeds your existing term life insurance coverage amount.

You’re concerned about long-term care.

It might be for a child, for an aging parent, a sibling, or even for yourself. If you’ve had a sudden uptick in long-term medical expenses related to a family member’s ongoing illness or medical condition, you might want to consider additional coverage. (Note: If you’re the one experiencing an ongoing illness or medical condition, this might affect your ability to get additional coverage, and potentially what you’ll pay for that coverage if you can get it.)

Your partner is no longer working.

If you’re in a relationship where both partners are working, you probably split your life insurance coverage accordingly. If this is no longer the case — say, if one of you is now staying home to raise a child — you may need a supplemental term life insurance insurance policy that factors in the cost of child care.

Choosing the right amount of additional coverage

As for determining how much additional coverage you need, and how long of a term you should apply for, that old rule of thumb still works, albeit with a key caveat. You still want enough coverage for roughly five to 10 times your salary. But you can also subtract your current coverage amount from that figure to determine how much additional coverage you actually need.

For example, if your new coverage needs equate to $1 million, but you currently have a $500,000 policy, you’ll want to apply for another $500,000 in coverage to make 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 in total coverage (if approved).

You might be wondering: why apply for a supplemental insurance policy instead of cancelling your existing one? Well, keep in kind that the rate you are currently paying for your coverage is based on your age 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 expensive than applying for $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 get a new policy just for the additional amount you need. This is one reason why Haven Life does not support policies that are purchased for the purpose of replacing existing coverage.

Phew. That’s a lot. Still wondering how much additional term life insurance coverage you might need? An online calculator might come in handy, or just check this preview of what you might expect to pay for such a policy if you’re a non-smoker in excellent health.

Applying for additional coverage

Remember our easy online application process, where you truthfully provided us with answers to a few important questions about your age, your health, and your coverage needs? Of course you do. That’s the power of simplicity. Well, get ready to do it again because you will need to re-apply to get additional coverage.

While some of the particulars will have changed, the general idea remains the same. Give us the unvarnished truth when responding to a few key questions, and we’ll review your application as quickly as possible. You’ll be treated like a new applicant throughout this process. For the vast majority of people (even those who were approved for InstantTerm previous), that means you’ll need a medical exam, which you can conveniently schedule for the time and place of your choosing. If you’ve experienced an exam before, you know it’s nothing to be afraid of — less fun than binge-watching your favorite show on the couch, sure, but almost as easy and it typically takes just 20 to 30 minutes to complete.

To be clear, it’s an application, so there is a chance you might not be approved for additional coverage. If you already have $3 million in Haven Term coverage, our maximum, you will not be eligible for another policy. If you have developed a chronic illness since purchasing your first policy, you might not be approved. And if you’re within 90 days of your first policy, Haven Life will instead help you add coverage to that policy.

All told, taking out a second policy is a great way 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 — a new baby, a new house, or a new job — means you need another life insurance policy, we are honored that you might consider us for it. Making life less hard is in our DNA, and this is one of the ways we can do exactly that.

Ready to start? Log in to your account page to see if you’re eligible for a second policy. If so, you can apply right then and there.