As life goes on, your needs and lifestyle change. With passing years, you get married, buy a new home and have kids. Your life keeps moving and with time the needs of your family also change. As such, your insurance needs change too.
When your life undergoes any major change, it is important to make sure that you have enough life insurance coverage. For this reason, it’s a good idea that your life insurance policy reflects your current needs. However, most people simply buy a life insurance policy and don’t frequently review it to ensure their coverage is still sufficient.
Annually reviewing your life insurance policy helps to ensure that the future of your loved ones is protected and your income earning abilities are secure. Thus, no matter how busy you are, it’s vital to schedule time to review your coverage with your agent or company representative on a regular basis. Insurance agents can help you make necessary policy changes according to your present needs, as well as examine the potential for changes in the coming years. In this post, we’ve listed some of the most prominent moments in life when you should review your life insurance policy.
1. When your marital status changes
You will need to review and adjust your life insurance plan after marriage. If you were single when you took out your policy, it may be time to change the beneficiary to your significant other. Similarly speaking if you’ve gone through a divorce, you may want to consider changing the beneficiary. At the time of divorce, if children are involved, it may become mandatory for you and your ex-spouse to purchase life insurance on each other.
2. Addition of a new family member
The addition of a child to a family can make a huge difference to the family finances. A review of your life insurance coverage is necessary with each child you welcome into this world. This is because, if something were to happen to you, your spouse may not be able to afford the costs of a child’s upbringing. Even if your kids are older and you’re more concerned about saving for their college, you may need to increase your life insurance to pay for their college, if something happens to you.
3. Increased financial commitments
If you’ve taken on more financial commitments, such as a mortgage or a car loan, it becomes imperative to update your life insurance plan. This is to ensure that in the event of your death, the level of coverage is adequate for your family to pay off any outstanding debts.
4. Increased income and changed lifestyle
If your income has increased dramatically since the time you took out your life insurance plan, make sure to review it. With an increase in income, your lifestyle changes. Your present life insurance coverage should ensure that your beneficiaries don’t need to change the way they spend money if you were to pass away.
No matter how your life changes, make sure to take the time to determine whether your life insurance coverage is still enough to take care of your loved ones. Remember, reviewing your life insurance is an integral piece to your financial plan.