When should you review your life insurance policy?
Do you know one of the most important reasons to review your life insurance is to make sure it stays in tune to the recent changes you might have had in your life? This can be anything like the birth of a new baby or the purchase of a new house. After all, so much can happen in a short span of 12 months.
Here are a few examples of life events that we think call strongly for a life insurance review.
- There’s a baby on the way
If there’s a baby coming to your beautiful family, you will obviously want to ensure you have enough life insurance in place to help secure your family’s financial future. If you or your partner die, this protection can help cover the resulting loss of income.
You may also consider having life insurance in place for your child. Talk to your advisor for more details.
- You have just started a new job
Few things in life can open the doors to your goals, like getting the job of your dreams. Making progress towards your dreams is a great accomplishment.
If you have recently got a promotion or a new job, check with your advisor to ensure your life insurance policy still meets your needs. Also, don’t forget to consider your additional pay and employer’s life insurance plan (if any) while reviewing your current policy.
- You are opening a new business
Whether you’ve opened a new online store or a brick-and-mortar business enterprise, your big investments have more likely come from a large loan or may be the result of a large personal contribution.
If you have invested a major chunk of your savings, an additional life insurance policy may be necessary to make up the difference and to insure your loved ones in the event of death.
And if you have taken out a loan, you should be at peace knowing that you have enough life insurance to cover that new obligation.
- You have taken on more debt
Did you get a home loan last year or a loan to consolidate your credit card payments to lower your interest rates? These small changes in your finances can make a big difference when your loved ones are on a fixed income.
While doing a life insurance review, it is, therefore, a good idea to have an estimated monthly budget in place. This ensures that you are have enough coverage for your beneficiaries to pay the bills and cover their living expenses.
- Changes in the health condition of your parents
The state of health of an elderly parent may force them to move. When that translates into assisted living or moving into your home, you can take on an additional financial burden.
If you have experienced any change like this, you should consider having additional life insurance. You may also want to consider final expense coverage for your elderly parents.
- You are getting married or separated
A change in marital status is an important life event. If you are recently engaged or married, you will probably want to make sure that your partner is named as the beneficiary of your life insurance policy. You may even want to increase your coverage since you are getting married.
If you are getting separated, you may want to verify the beneficiary name on your policy. When this step is overlooked, previously named beneficiaries might be legally entitled to funds that you might want others to receive.
- Your children are moving to college
As your children move to college, they are still dependent on you financially. Hence, it is wise to verify that the death benefit is sufficient for them to continue their education without any problem.
- Medical diagnosis of a loved one
Health issues can arise at any time, and when they do, they can cause many changes, often very quickly. As the conditions become more and more complicated, they tend to become more expensive. Hence, it is a good idea to take these future expenses into account when considering your life insurance policy.
- You have bought a new house
If you’ve recently completed the purchase of a new home, this is a change you should discuss with your insurance advisor. With a new mortgage in place, you must have enough coverage in place until the mortgage is paid off.
Need a life insurance review? Get in touch with our advisors
At Trust Life, we have over 30 years of experience providing expert insurance and investment advice for both businesses and individuals. Get in touch with our advisors today for a quick need-based life insurance review. No fees and no obligations!