Recently Promoted? You Need a Life Insurance Policy Review

Being Promoted

I bet you were wondering how getting promoted and life insurance are related? It has to do with how much money you made and are now scheduled to make. Did you recently get promoted? Congratulations! Maybe you’re getting bigger office, perhaps some better perks or benefits, you’re probably getting a larger salary.

One of the factors in determining an amount of life insurance coverage is appropriate is income replacement. If you make $50,000 a year, a $500,000 life insurance policy protects 10 times your salary. It should reasonably follow that if two people, one making $20,000 a year and the other making $100,000 a year, wanted to calculate their life insurance need based on income replacement, that they would have very different numbers. Since I do this for a living and talk to a lot of people, I can say that you would be surprised how many people of different socio-economic backgrounds call in asking for quotes on the same policy amounts. No two people or situations are exactly alike.

Although the current trend is that divorce judgments regarding alimony payments are no longer in line with “in the manner accustomed to living”, if you were to die unexpectedly, in what manner would you want your survivors/beneficiaries to live? If you make a home with your significant other, are happy, and are doing that on a $40,000 a year salary, if you had a $200,000 policy, your family could live in the same manner for 5 years before the money is all gone. If you made $1,000,000 a year and you had a $200,000 policy, somewhere in month 3 after your passing, your family would be facing some financial hardships. The concept, I hope, is starting to become clear.

Getting back to you getting a promotion, if you go from making $20,000 to making $22,000 or from $1,000,000 to $1,100,000, your life style may not change very much. The extra money helps, but it’s not life altering. However, if you go from making $20,000 to making $40,000 or $1,000,000 to $2,000,000, you may live your life differently. That’s the point. Forget thinking about dying, after a year of your new lifestyle; imagine your salary went to $0. How would your life change?

Getting you to think about properly insuring yourself is part of my job. That’s also something that LIMRA does. In a study last year, the Life Insurance Marketing Research Association’s CEO said “LIMRA’s research shows that people do not fully understand the risks they take by not having adequate life insurance coverage”. Do an annual review. Just like you regularly check your investment portfolio, you should review your life insurance. I just helped a client insure herself and in the process she realized that her husband needs to do some re-evaluating, as in the 7 years since he got his policy, they have had 3 children.

Robert Kerzner, CEO of LIMRA succinctly says, “Life insurance is the one product that can help families keep a roof over their head, provide for basic living expenses and allow time to recover and heal from the loss of a loved one.” Life insurance makes sure that financially speaking, your family’s life isn’t disrupted if you passed away unexpectedly. If you’ve gotten a promotion and the quality of your and your family’s life has improved, you need to review your current life insurance. 

About the author: Anthony Veloso has been in the life insurance business for over 2 years. He enjoys coaching football, playing outside with his dog, and taking day trips with his wife and newly born daughter. Anthony is a strong supporter of Orphanages and Battered Woman’s shelters. He would love to put his experience to work for your family to ensure that you have the right life insurance policy. You can contact Anthony at 1-800-654-1953 or