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These Big Changes in Your Life Will Affect Your Insurance Needs

Whenever we reach one of the milestones that mark our lives, we need to take a look at whether we have adequate insurance coverage to protect us and our loved ones. 

You Got Your First Job: You may have held part-time jobs while in school, but you've probably never made this much money before. 

But with this financial independence comes responsibility. If you're living on your own for the first time, you'll need renters insurance for all of the things you're accumulating – a professional wardrobe for work, furniture, computer, etc.

Renters insurance can also cover the cost of staying in a hotel if your apartment burns down or otherwise becomes uninhabitable, and if covers you if someone hurts themselves in your apartment and sues you. And best of all -- it's pretty cheap, $100 a year in some cases.

If you're be driving to work, chances are you are no longer covered under your parent's auto insurance and will need your own insurance.

Disability insurance might be the last thing on your mind now, but young people are four times more likely to be disabled than die, according to trade group the Insurance Information Institute.

Many employers offer this kind of coverage, which replaces income lost if you're hurt in non-work activities and unable to work, though it may be limited and you may have to pay for it out of your own pocket. Of course, if the injury is work-related, then workers compensation coverage applies.  Check with your employer.

You Got Married: If you and your spouse both work and you don't have any dependents, your insurance needs may not change much after you're married. But if one of you is still in school, or would be unable to pay all the bills in case of the death of the other, it's time to think about life insurance.

If you've just bought your first home, consider buying enough life insurance to pay off the mortgage.

If you don't already have it, disability insurance is as important as life, particularly if you're relying on just one salary.

If you buy a home after getting married, you'll need coverage for the value of your home and its contents with homeowners insurance. If you are living in a condo or coop, you depend on two insurance polices for protection: your own coverage and the insurance purchased by the condominium or co-op board for the common areas of the property, like the roof, basement, elevator, boiler and sidewalks.

The condo or co-op association may be responsible only for insuring a unit up to its bare walls, floor and ceiling. The owner may have to insure kitchen cabinets, built-in-appliances, plumbing, wiring, bathroom fixtures and so on.

You're Parents: If you still don't have life insurance yet, this is the time you absolutely need it. In addition to paying off major debt, such as credit cards or the mortgage, you'll need to think about replacing your income or your spouse's income in the event something happens to one of you. 

Even non-working parents need life insurance, because you would have to pay someone else to take care of the children.

This is also a good time to update your homeowner's insurance, because you will inevitably acquire more possessions as the children grow and need more stuff.

Once the kids reach driving age, you'll need to add them to your auto policy.

The Kids Are Gone: Once the kids have left the house, your insurance needs will change. You may keep them on your auto policy while they're in school, but once college is over, they need to get their own. You certainly won't need as much life insurance after they graduate.

Though you may not need it for several decades, start thinking about long-term care insurance, which pays for help performing everyday activities like eating, dressing and bathing if you become chronically disabled. 

The earlier you consider buying long-term care coverage, the cheaper it will be. Once the premium is set, it stays at that amount for the life of the policy, unless the claims for the group of people who have bought that type of policy require that rates for the group be raised, according to the III.

You're Retired  Downsizing? Moving to another part of the country? If so, update your homeowner's insurance. You won't need disability insurance now that you've stopped working and are living off of your assets. But it isn't too late to consider long-term care insurance, although it will cost more now.

Allison Bisbey Colter is a freelance writer in New Jersey whose work has appeared in The Wall Street Journal and American Banker. She is a former editor at TheStreet.com and a former reporter for Dow Jones Newswires.

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