Five Reasons to Review Your Life Insurance
There’s really only one reason to buy any kind of insurance: To protect yourself or your family from financial loss that you can’t handle on your own. For most people that means buying life, disability, health, and car insurance.
However, a lot of people think that once they buy a life insurance policy they can set it aside and forget about it. As with your other insurance, reviewing your life insurance needs is crucial.
Here are five reasons to review your life insurance:
1.Your Marital Status Changed
Congratulations! You just got married – it’s time to review your life insurance! You now have a spouse, someone who may be dependent on you, so it’s important to figure out how much life insurance you need.
Unfortunately, people get divorced. If that’s the case, maybe you don’t need that much coverage anymore. Also, make sure to update your beneficiaries.
2.Your Family Status Changed
Congratulations, you just had a baby. But, this is also the beginning of a long-term financial commitment. To be prepared for the unthinkable, you need life insurance, and enough of it. If you already have kids you know what I’m talking about.
If you have older kids you might be more concerned about college savings than you are about life insurance. Or, you may need to increase your life insurance if you want to pay for their college should something happen to you.
These conversations aren’t fun but they are crucial to providing for your family and are very important when reviewing your life insurance policy.
3.Your Housing Status Changed
Maybe you just paid off your mortgage and you don’t think you need as much life insurance anymore. Or, you just bought your first home and now you have a liability that would need to be paid if you died.
Review your life insurance when your home ownership status changes – you may need more or less life insurance, but at the very least question how much life insurance you need.
4.Your Income Changed
Perhaps you were promoted in your company and you’re about to receive a nice raise – how does that impact your life insurance needs?
Or, you lost your job and it’s time to re-evaluate your life insurance situation.
Whether you have a new job or you lost one, it’s a perfect opportunity review of your life insurance.
5.Your Health Changed
This is an important one! Let’s say you’ve been working out and eating healthy. As a result, your blood pressure went down. Did you know this could affect your life insurance rates!
Companies generally reward you if you are in great health by offering you discounted premiums. You may want to call your insurance company and ask what kind of rates you’d get for a preferred health discount.
The discounts in many cases can be substantial!
Keep This In Mind
It’s important to evaluate how long you will need this safety net and how much you will need. If you have kids in college and are still paying a mortgage, then it’s a good idea to continue to insure yourself and your spouse. Once your mortgage is paid off and your kids no longer need financial support—and assuming you have been saving all along for retirement—you shouldn’t need the added expense of life insurance. But, it’s important to evaluate this need on an ongoing basis.