Buying life insurance gives you the peace of mind knowing that your family will be financially protected if something happened to you. It’s important to know that your policy isn’t a “set it and forget it” product. It’s not something you are thinking about on a regular basis, so it can be easy to forget. Out of sight, out of mind, right? After purchasing a life insurance policy, it should be reviewed every few years and especially after any major life changing events. Just as our life changes, our life insurance needs change.
Here are six common events in which you may want to review your policy to ensure you have adequate life insurance coverage.
Marriage or Divorce
When you get married, you will want to review your life insurance policy. Does your spouse rely on your income? Do you pay all the bills jointly? Would your spouse suffer financially if you were to die? This is a good time to evaluate your needs and change beneficiaries if needed. If you are going through or have been divorced, you may need to make some modifications as well.
A Home Purchase
Buying a home is a large purchase and, for most of us, we need a mortgage to make that happen. Make sure your life insurance policy can cover the remainder of your mortgage cost. You don’t want to leave your loved ones unable to pay the balance on your loan.
A Child or Dependent
We all know that raising a child is a huge expense and making sure they are financially taken care of is a must. Anytime you add a child to your family, you want to look at your coverage. There’s always an option of purchasing an additional term life insurance policy that will carry you through your kids’ college years.
Whether you got a big raise or your employment changed from part-time to full-time, it’s good to make sure you have the right amount of coverage you need. With different income levels comes different life insurance needs.
Taking out a loan means more debt. If the loan is large enough to cause financial stress to your loved ones if you die, think about modifying your policy. A car loan is a good example of an instance where you may consider reviewing your life insurance. You don’t want this debt passed on to your loved ones.
Another instance where you want to think about changing beneficiaries (besides marriage, divorce and dependents) is if your main beneficiary passes away. Many people buy life insurance while they are single and name their parents or even grandparents as beneficiaries. Or, perhaps you named someone a beneficiary because they co-signed a loan for you. Once that loan is paid off you may want to change your beneficiary designation.
These aren’t then only events that could cause you to review your policy, but some of the more common ones. By actively reviewing your policy every few years, you can ensure that you have adequate coverage to meet your needs and lifestyle.
If you don’t have life insurance, it’s easy to run term life insurance quotes on Quotacy.com to see how much it would cost to financially protect your loved ones. We don’t ask personal information until you are ready to commit.
Photo credit to: Kat Grigg