I did not increase my life insurance coverage even though my income doubled. here’s why


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It’s a strategy that made sense to my family.

Key points

  • It is important to have reasonable life insurance coverage.
  • While some people like to increase their coverage as their income increases, I choose not to.

My husband and I made the decision to buy life insurance after having a baby. Before that, it wasn’t really on our radar, but we decided to meet with a financial adviser who did a great (and needed) job of convincing us that having a policy in place was the right thing to do. .

When we first started exploring our coverage options, we were torn between term life insurance and whole life insurance. We liked the idea of ​​getting a whole life insurance policy that would accumulate cash value. But we also didn’t want to spend too much on life insurance, and it was clear that term life insurance would be considerably cheaper.

In the end, we decided to go for term life insurance for both of us. But we bought a larger policy for my husband than the one we bought for me because his income was higher.

Meanwhile, my income has actually doubled since we set up our life insurance policies. How? Now that my children are older, I have easier and more reliable access to childcare, which allows me to work longer hours during the week.

Also, since my children are now more independent, I don’t need to spend time every morning brushing and dressing them, or spending time in the evening showering them. These are more things they can do themselves, and it frees up a lot of time for me to work.

And finally, I’m happy to say that over the years, I’ve just become more efficient at my job. I have also accumulated a lot of knowledge on different topics that I write about, so while I may have had to spend time researching certain topics years ago, these days I don’t have to do all that groundwork.

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But while I’m certainly glad my income has grown a lot over the years, I’m not rushing to increase my life insurance coverage. Here’s why.

When you already have coverage you’re comfortable with

My husband and I always planned on having kids, and we knew we needed the financial flexibility in that regard so that one of us wasn’t working for a while. So when we took on bigger expenses, like our mortgage, we based them on his income alone.

In fact, even though I work full time these days, we still pay for our essential expenses from my husband’s income. We try to use my income for things like savings, vacations, hobbies, and home repairs (so we don’t have to dip into those savings).

Because we are trying to live largely off my husband’s salary, we decided to buy him some good life insurance. But since we’re not as dependent on my income, we bought less coverage for me early on and don’t plan to increase our coverage anytime soon.

From our perspective, the coverage we now have between our two policies is a reasonable sum. And so we don’t feel the need to incur higher premium costs by increasing my coverage to account for income that I earn that we don’t really rely on.

Do you need more life insurance?

If the primary breadwinner in your household starts earning more money and you improve your lifestyle based on that, it might be beneficial to increase your life insurance coverage. But otherwise, you don’t have to rush to buy more coverage every time your income increases.

In my case, we did not take on more expenses because of the doubling of my income. Sure, we could travel more now that we have that flexibility, but traveling isn’t a commitment in the same way a mortgage or car payment is. And so for now, we plan to leave our life insurance coverage as is.

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