How Long Should You Keep Your Life Insurance?

When it comes to how long to keep life insurance, there’s no answer that works for everyone. It comes down to why you bought life insurance in the first place and if that reason still applies. 

For Your Kids 
If you bought life insurance for your kids, how long are you planning to support them? You may wish to carry coverage until they graduate, start their first job or buy a home. Even if you aren’t planning on providing much direct financial support, even things like keeping them on your health insurance or having them live at home in the summers could mean extra expenses that they’d face without you. 

For Your Spouse 
If your life insurance is to help protect your spouse, what money is that replacing? Was it just until your spouse finished school and started their career? Are you looking to replace your salary? Would your pension change if something happened to you? Keep your coverage until those scenarios are addressed. 

For Debts 
If you bought life insurance to protect your co-signer or family from being burdened on your debts, the answer is simple. Keep your coverage until you pay off the debt. As the debt decreases, you can also consider reducing your coverage to match it if you don’t need coverage for other reasons. 

For Estate Taxes 
If you have a large estate, you may wish to carry life insurance to cover the potential taxes. Many estates are in hard assets such as real estate or business interests that your family would need to sell to pay the tax bill. Having life insurance to pay the taxes keeps those assets in your family. 

For General Uncertainty 
Life insurance can be harder to get and more expensive as you get older. That means that even if you aren’t entirely sure that you’ll need it later, it can still be a good idea to carry it just in case. A good rule of thumb is if you have any doubts, don’t change what you have. If you have a clear reason for making a change, make the change.