If you've a life insurance policy, it’s recommended that you review your policy every couple of years or whenever any significant life event happens. Life is ever changing, hence you should make necessary changes in your policy whenever required. Here are 5 scenarios when you should review your policy:
1. Marriage or divorce: Just married? It might be time to review your life insurance policy for any changes since your family is bigger now and you’re sharing your finances with another person. If you thrive from paycheck to paycheck, it might be time to move to term life insurance if you don’t have one already. Term life insurance will offer your spouse the necessary income replacement in case you die a premature death. However, if you're contemplating a divorce, there are a number of financial issues to be taken care of. Among those, updating the beneficiary list of your life insurance policy should be a priority.
2. A new baby: Another instance when reviewing your life insurance policy is necessary if you're going to have a baby. Undoubtedly, the new little footsteps are blessings of the Almighty. But sometimes, those also bring financial strains down the line. Raising a child costs a lot of money and if your income is somehow lost, you’d struggle to support your family. Here an additional income protection rider with your basic life insurance policy might prove to be fruitful.
3. A new home: Are you planning to go for a new home? See if your policy has the potential to pay off a mortgage in case something unfortunate happens to you. Paying monthly mortgage payments with two incomes is easy. But could your spouse afford to pay off the premiums all alone? Moreover, if you've kids, you should ensure their shelter in the event of your premature death. So, check your policy if it covers for your mortgage.
4. Job changes: Did you get a promotion or change your job recently? Along with the new fortune, you may have decided to get a bigger truck, a swelling mansion and send your kids to the best private school in the city. Though none of these is affluent or unnecessary, you should make required adjustments in your life insurance policy. Increasing your term insurance coverage will help your family continue their new standard of living in the event of a tragedy. However, if you had a group life coverage with your previous employer and your present employer doesn’t offer life insurance among the benefits, you need to re-evaluate your life insurance situation.
5. Health changes: Have you recently been on a new and improved health arrangement? Are you consuming healthier foods and working out more than ever before? Congratulations, as you may qualify for new life insurance rates. If you've recently quit smoking or intaking alcohol, you may qualify for new and lower rates. Check with your insurance carrier for details. However, if for some reasons your health declines, you need not worry as you're already protected and moreover, the rates won’t get affected. This is one of the most important reasons why buying life insurance sooner than later is best.
Life insurance is not a ‘set it and forget’ product. It’s significant that you review your policy often to make sure all the clauses are in place to carry out your wishes when you’re no longer around.Blog Category