7 Events That Increase Your Need for Life Insurance

Many people don’t truly understand the importance of life insurance until the moment they hold their child in their arms for the first time. Life changes in that moment. Your child is looking to you for everything.

According to the 2025 Northwestern Mutual Planning & Progress study, the cost of having a baby is top of mind for many people—and 29 percent of Gen Z say having children is one of their greatest affordability concerns, second only to buying a house (46 percent).

Hospital costs and diapers are probably on your mental list of what your financial obligations as a parent will be—but they’re only the beginning. You’ll also have provide your little bundle of joy with food, shelter, clothing, health care and education—all the while doing your best to keep them entertained—as they grow.

So it makes sense that having your first child is also a relatively well-known reason to purchase life insurance. But there are many other times in life when your need for life insurance will change. Even if you already have a policy in place, there are key moments when you might want to add to or change your coverage to ensure your life insurance keeps up as your life evolves.

1. Getting married

Getting married means committing to sharing your life with someone, but it also means making a financial commitment to help care for and support them. If you were to die, what financial commitments would they have? Financial planning for couples can provide peace of mind by answering serious questions like these—and life insurance is a big part of that. You’ll have more peace of mind knowing your spouse can not only continue his or her standard of living if something were to happen to you but also keep pursuing their dreams, even though they may look different without you.

2. Buying a home

Buying a home is a big step for many people because it means being responsible for a mortgage. Life insurance can help your loved ones cover the cost of the mortgage if the family was to lose your income.

3. Starting or adding to your family

Many people purchase life insurance or add additional coverage when they are having a baby for the first time or adding to their family through the adoption process. That’s because the loss of one parent’s income can be financially devastating for a family. Life insurance can help the family continue financially by covering day-to-day costs, college and even the surviving parent’s retirement someday.

Having enough coverage in place when a parent dies allows the family to focus on what’s important during the grieving process and provide support for moving forward.

4. Starting a new job

Many employers offer life insurance coverage but it typically ranges from one to two times your annual salary. So as you move to another employer, you’ll want to understand how this benefit will change. Coverage from your old employer will typically end when your job does. That’s why it’s a good idea to have your own policy because that coverage will go with you as your career evolves.

Depending on the new coverage available to you (and what else you have going on in life), you may decide you want to add more.

Leaving a job for a new one typically also means a change in salary, which may also shift your standard of living. Now that you’re making more, you may want to add additional life insurance coverage to reflect your new income.

5. Starting a business

There are many roles life insurance plays in business planning. If you have a business partner, life insurance could help him or her buy your share of the business from your surviving family. It could also protect investors, who may be concerned about their investment should something happen to you.

As businesses grow, it’s not uncommon for business owners to add permanent life insurance, which offers a lifetime death benefit and accumulates cash value that you can access for any reason during life. The cash value can become a source of liquidity for the business.¹

6. Supporting aging parents

Long-term care planning is a financial blind spot for many, as facing a loss of independence is something most people don’t want to think about. This is why so many daughters and sons end up providing financial support to their parents—and even more help them around the house. If something were to happen to you, your parents could suffer.

Getting life insurance with the intention of taking care of your parents financially would give you peace of mind knowing that they will be well cared for even if something were to happen to you.

7. Taking out student loans

If you co-signed for someone’s private student loans, you will be on the hook if something were to happen to that person.

It’s important to know that the death of the borrower is considered a default by lenders, which means you could be responsible for repaying the full balance of the loans. Getting a life insurance policy on the borrower is a good way to protect yourself should something happen to the person you co-signed for.

Evolving life insurance over time

While the life events listed above are times when people often add to their coverage, there are also times when it may make sense to reduce or evolve your coverage. As you get older, you may pay off your mortgage. Perhaps the kids will have moved out and can now support themselves. Even though you may not need the full amount of your term death benefit, converting a portion to a permanent policy may be a good idea. And while there may come a time when it seems like you no longer need coverage, if you have permanent life insurance, your policy can likely play an important role for you for the rest of your life as part of a comprehensive financial plan.

That’s why working with a financial advisor you trust, who can make recommendations suited to you at any point in time, is an important step in reaching your financial goals. Your Northwestern Mutual financial advisor will meet you where you are to create solutions to help you reach your specific short- and long-term goals and priorities. Together, you can design a plan that will perform and evolve over time—just as you will.

¹ Utilizing the cash value through policy loans, surrenders, or cash withdrawals will reduce the death benefit; and may necessitate greater outlay than anticipated and/or result in an unexpected taxable event.