If you have life insurance, it’s a great idea to review your life insurance policy every couple years or every time a significant event happens in your life. Life brings changes which may bring the need for insurance changes. Here are five times when you should review your policy:
1) Marriage or Divorce
Getting married soon? Now that your family is growing and you will be sharing finances with another person, your life insurance needs may change. Many couples rely on two incomes to pay day-to-day expenses. If you died prematurely, your spouse would soon feel financial struggle in addition to the emotional and physical devastation from losing you. Term life insurance will provide income replacement in the event of pre-mature death.
Are you contemplating a divorce? There are a number of financial issues to think about and life insurance should be on this list. Update your beneficiaries if necessary. There have been horror stories of people dying and never removing their ex-spouse as the primary beneficiary. If you remarry, this is also a time to review your policy.
2) A New Baby in the Family
Another instance in which reviewing your policy is essential is if you’re going to be a first-time parent, or you’re having another baby. A baby is a blessing, but it also can place strain on finances. Raising a child costs a quite a lot of money and if one income is lost, the surviving parent would quickly struggle to support the family alone.
Maybe there is a new baby in your family, such as a grandchild. You may want to pass along an inheritance to them. This is something you can put your life insurance to use for.
3) Purchasing a Home
Did you and your spouse decide to purchase a new home together? Review your policy to see if your coverage amount is enough to also pay off a mortgage. Again, paying expenses is manageable with two incomes, but could your spouse afford to pay for the house all alone? Especially if you have children ensuring they can stay in the home they are familiar with can mean a lot when dealing with the death of a parent.
Maybe you’re purchasing a second home; a vacation home in Florida, for example. With all the excitement going on, don’t forget to review your life insurance. Any time your housing status changes, it’s time to review.
4) Job Changes
Did you get a promotion? Along with a big promotion, maybe you decided to get a nicer car or bigger home. Maybe this means you are now sending your children to the best private school money can buy. Adjust your coverage amount. Increasing your term insurance coverage will help your family continue their standard of living in the event of tragedy.
Did you have a group life insurance plan with your old job? What benefits does your new job offer? If life insurance isn’t one of them, you need to re-evaluate your life insurance situation. Any job change brings the need to review your policy.
5) Health Changes
Have you been on a new health regime? Eating healthier and working out 30 minutes a day? Congratulations, you may qualify for new life insurance rates. It may benefit you to re-apply. Quitting smoking, lowering your cholesterol or blood pressure, are just a few examples of when a health change can affect your rates for the better.
If your health declines you do not need to worry if you already have life insurance. If you have been paying your premiums and your policy is in force, a negative change in your health will not affect your rates. 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 it” product. It’s important to review your policy often to ensure it’s in place to carry out your financial wishes if you’re no longer around. If you are looking to purchase your first term policy, or want a new or additional policy, you can run as many free term life insurance quotes as you would like without giving up any personal contact information. Term life insurance is very affordable and great peace of mind.