Statistically, two big things happen around your late 20s or 30s. You’ll buy a house. The house will be turned upside down by the pitter patter of a tiny peril. Both may prompt you to buy life insurance. The policy will usually cover you into your mid 50s. Job done. Kick back and relax.
Life doesn’t stand still
Not so fast. Kids grow. They start making demands, like wanting a good education. And siblings. Suddenly that two-up two-down feels a little squashed. Then your Dad takes a funny turn and it’s the old folks home for him. Except his state pension doesn’t go that far, so you’re stumped with the bill. And one day it hits you — life has become very different. But your life insurance policy hasn’t changed.
Or perhaps nothing changes. Maybe the family you dreamed of didn’t happen. Maybe your career stalled. Maybe you’re stuck right where you were. And that cover you’ve been forking out for has been a big waste of money.
This is the problem with traditional life insurance. It expects you to have a crystal ball, pay the same monthly premium throughout, and never make any changes. (So three problems, actually.) That’s why most people are either paying too much to over-insure themselves, or their life cover payout is no longer enough for the responsibilities they now have.
What if you could update your life insurance policy as your life changed? What events would change the cover you need?
Some medical exams will also involve blood testThis is a story of (most) lives
Let’s start with those little tots. Each one that arrives is another torrent of constant expense. Nursery and childcare doesn’t come cheap, and neither does university. Thankfully the state still picks up the tab in the middle. But sometimes you get what you don’t pay for. What if the local comp offers the educational attainment of a melon, or you’d like little Jonny to rub shoulders with the offspring of landed gentry and Sheikhs. That’s another seven years of fees.
Then fast forward a few years. University done, job got, and the little mites are standing on their own two feet. Now if you die they’re less financially screwed, so your coverage can come down.
What other payments go up and then down? Yep, mortgages . Hopefully that crappy little dive you could only just afford won’t be your last home. And one day, those pesky interest rates might come storming back like it’s the 1980s again. By then the coverage you took at the start of your policy might look a little light. But like a beautiful bell curve, your mortgage liability will come down, and with it the level of cover you need.
Next up, your career. As a general thumb of rule, the older you get, the more you earn, and the more expensive your lifestyle becomes. So for those who rely on your income, carking it when you’re young won’t be such a financial shitshow as expiring at the peak of your powers. Later in life, if you’ve been astute enough to rack up savings, your loved ones can call on this little nest egg instead of counting on your policy to payout. So, just like with kids and mortgages, you’ll probably want your coverage and monthly premiums to go up steadily, and then down steadily, in line with how life actually turns out.
Don’t forget 50% of marriages end in divorce, or thereabouts. So if you’re wondering what happens to life insurance if you divorce, we’ve created another handy guide for you. You’re welcome.
This is how we do life insurance at DeadHappy—life insurance that adapts with your life, year by year. That lets you start small and refresh your cover every year as your life changes. Cause that’s what some people want. We thought so anyway.