Like many types of insurance, a life insurance policy is something that you should update regularly. Signing up for coverage is a great start, but as life changes, so should your policy. There are many factors that could impact how well you’re insured. Reviewing your policy annually will help you determine if any changes need to be made. Without a check-up, you could easily be left underinsured and susceptible to a lack of coverage. Make an annual life insurance review part of your yearly financial planning. It might be worth more than you think. In this article, we’ll take a look at some of the reasons for updating your life insurance policy regularly.
Major life events such as getting married, divorced or starting a family can have a major impact on your life insurance needs. If you’ve added another member to the family, you may need to increase the amount of your coverage so your family will be further protected in your absence. If you’ve recently divorced, you may want to start a new policy all together or adjust your current beneficiaries.
Conversely, events that happen toward the end of your life may make your policy that much more affordable. If you’ve retired in the last year, you may want to limit your death benefit. You and your partner may have enough money to live out the remainder of your life without the help a hefty life insurance policy. If your children have grown, moved away or gone off to college, you may want to lower the amount of your policy now that your children are no longer financially dependent. If you’ve paid off your mortgage, your living expenses might be that much cheaper. Thus, your beneficiaries might need that much less to live on in the event of your absence.
As you update your life insurance policy annually, it’s also important to compare policies and prices across different companies. As the years go by, another insurance provider may be able to offer you and your family a better policy. Keep your life insurance up-to-date. It makes all the difference.