3 Reasons You Might Need More Life Insurance in 2023

Life changes and so do your insurance needs.

The new year is right around the corner, and now is a great time to review your finances and make whatever changes are necessary to set yourself up for the best possible 2023. Reviewing your budget is a good first step, but don't forget to look over insurance coverage as well.

Those experiencing one or more of the things listed below may want to consider purchasing a life policy or adding additional coverage for next year.

1. Adding a new family member

Getting married or welcoming a child into the family can increase household expenses and place an even bigger financial burden on loved ones when a breadwinner dies. So can caring for aging parents who aren't able to live on their own or don't have the savings necessary to do this. Life insurance helps ease some of the burden on survivors by providing them with funds they can use to pay off their debts and cover their everyday expenses.

How much life insurance a person needs depends on their expenses. Generally, it's a good idea to have at least enough to pay off any household debts, cover funeral costs, and replace the policyholder's income for as many years as necessary to provide for their family.

2. Moving into a more expensive home

Larger homes often bring bigger mortgages, and even many "small" mortgages can cost hundreds of thousands of dollars. Homeowners who purchased a life insurance policy using the cost of their previous, smaller mortgage as a guide may want to redo their calculations based on their new home.

Keep in mind that a mortgage isn't the only cost associated with homeownership. There are property taxes, homeowners insurance, and upkeep. Try to keep the total cost in mind when estimating the financial burden that the home could place on loved ones.

3. Taking on additional debt

Life's been tough these last few years and a lot of people have found themselves taking on new or additional debt to cope with rising inflation. It may not be easy for these folks to spend money on more life insurance when they're already trying to pay down the debt they have.

But those who are able to spare the cash may want to do so. Increasing life insurance coverage will help family members to pay off these debts so they can focus on their own expenses moving forward.

Even those who haven't experienced any of the three things listed above may want to reevaluate their life insurance coverage right now. Inflation has made everything more expensive, so a larger life insurance policy might be necessary to cover the household bills and pay for the policyholder's funeral. Taking the time to review your coverage annually could make things a lot easier on loved ones if the worst happens.