A new job Life insurance isn't a 'buy-it-and-forget-it' financial product. Just as your family evolves over time so, too, should your life insurance coverage. According to the National Association of Insurance Commissioners (NAIC), starting a new job is one time to review your life insurance policy.

A quartet of reasons for life insurance

Nationwide Mutual Insurance Co. states there are four primary reasons to buy life insurance:

  1. Protecting your mortgage
  2. Replacing lost income
  3. Paying final expenses
  4. Paying college tuition for children

A new job can affect your family's plans in each of these areas. You might upgrade homes, purchase a new car or start a family once you have the security of a larger paycheck--all good reasons to evaluate whether you have enough life insurance coverage to pay the bills should you unexpectedly pass away.

How much life insurance should you carry?

While an increase in income may mean you need to change your death benefit, the amount of coverage you need might not be so clear. In the past, experts simply advised that you should have coverage equal to five-to-10 times annual income. Today, financial advisors use a variety of methods and life insurance calculators to determine the right amount of term life or whole life insurance.

One method to calculate your life insurance coverage need includes considering the number of dependents, the length of time they will rely on you financially, and the lifestyle you want them to maintain after you are gone. Other methods include estimating how many income-earning years you have left until retirement and multiplying that number by your expected annual income.

Meanwhile, New York Life recommends a formula that assumes a lump sum of the death benefit will be invested and earn a 7 percent return. The life insurance company advises individuals to first calculate monthly expenses and divide the amount of yearly ongoing expenses by .07. To that amount, add one-time expenses such as burial costs and estate taxes to determine the total death benefit needed.

Regardless of which method you choose, take income into account. A bigger paycheck undoubtedly means it is time to beef up your life insurance protection. If you aren't sure how much your death benefit should be, you can use an online life insurance calculator.