Many people make the mistake of thinking that they can “set it and forget it” once they purchase a life insurance policy, failing to regularly review their coverage and address their insurance needs. However, it is important to review your life insurance policy regularly, at least annually, to ensure that it meets your current needs and financial obligations. If you don’t have a financial plan or don’t review it annually, there are several key guidelines to consider when deciding if you should review your life insurance.
Income Changes
If you have recently graduated from college and landed a high-paying job, been promoted at your current job, or lost your job, it is a good idea to review your life insurance coverage. These changes can impact your financial obligations and responsibilities and may require adjustments to your life insurance policy.
Health Changes
If you have made positive changes to your health, such as lowering your blood pressure or losing weight, you may be eligible for discounted premiums on your life insurance policy. On the other hand, if you have been diagnosed with a chronic illness, it may be necessary to increase your coverage to ensure that your family is protected.
Family Status Changes
If you are expecting a child or have older children who are approaching college age, it is important to review your life insurance policy to ensure that it meets your current and future needs. This includes considering who will provide for your children if something happens to you, and whether you need to increase or decrease your coverage.
Housing Status Changes
If you have recently paid off your mortgage or purchased a new home, it is a good idea to review your life insurance coverage to ensure that it meets your current financial obligations. This may involve adjusting the amount of coverage you have, or considering whether you need to add coverage for a mortgage or other debts.
Marital Status Changes
If you have recently gotten married or divorced, it is important to review your life insurance policy to ensure that it reflects your current situation and financial obligations. This may involve adjusting the beneficiaries on your policy or changing the amount of coverage you have.
Retirement
As you approach retirement, it is a good idea to review your life insurance policy to ensure that it meets your needs during this new phase of life. This may involve adjusting the amount of coverage you have, or considering whether you need to add coverage for long-term care expenses.
Policy Expiration
If your life insurance policy is about to expire, it is important to review your coverage and consider whether you need to renew or replace it. This is a good opportunity to review your coverage and make sure it still meets your needs.
Conclusion
In conclusion, there are several key reasons to review your life insurance policy regularly, including changes to your income, health, family status, housing situation, marital status, retirement plans, and policy expiration. By regularly reviewing your coverage and addressing your insurance needs, you can ensure that you and your family are financially protected in the event of your death.
