Inflation can essentially take the “muscle” right out of your future purchasing power. It may similarly affect your life insurance, triggering the need for additional coverage to help protect your current lifestyle and future objectives. In the interest of protecting against the eroding effects of inflation, here is a quick look at three common reasons to strengthen your life insurance coverage:
- Home mortgage costs. The days of staying in one home forever may be long gone. Americans seem to be constantly on the move—perhaps the increased mobility may stem from factors such as greater employment opportunities, dual incomes, and changing family dynamics. These factors may be contributing to today’s growing trend of purchasing “more” house than in the past. Likewise, escalating real estate prices have translated into larger mortgage loans. So, if you have recently purchased a home, you may consider obtaining additional life insurance to help cover your new mortgage.
- College tuition bills. If you are planning on sending your children to college, you may be concerned about the rising costs of higher education. Currently, the average annual cost for a four-year public school in Maryland is $9,521 while the average annual cost of a four-year private college in Maryland is $43,141. Because the costs continue to rise, it may be prudent to develop a contingency plan, such as utilizing life insurance in the event of an untimely death. Having this coverage in place can help ensure the educational funding will be there for your children even if you’re not.
- Everyday expenses. Groceries. . . gas. . .movies. . .family vacations. . .or home improvements. Whatever the outlay, inflation will greatly affect the costs associated with maintaining your family and lifestyle. And, if your life insurance needs are based on your current income and today’s cost of goods and services, you may potentially short-change your family’s future. Your insurance strategy should include an assessment of both your current and future needs, as well as objectives to help you manage these expenses.
Staying Ahead of the Game
Determining your current and future life insurance needs may require you to pay careful attention to inflation and its potential effect on your lifestyle objectives. You may want to consider battling this erosion factor by reviewing your insurance coverage annually to help ensure your life insurance policy remains a contender in the continuous fight against inflation.