Insurance is intended to protect your assets and to help cover certain risks.
Policies may have standardized language, but each insurance policy should be tailored to your needs at the time the policy is written.
A lot can change in a short amount of time – so an annual insurance review is a good habit to develop to help ensure your coverage still addresses your needs.
Life changes, and then changes again, and again
There are some obvious reasons to review your life insurance coverage, like if you’re getting married or having a baby – but there are also some less obvious reasons that may change your coverage requirements, like changing jobs or experiencing a significant change in income.
Here are some of the reasons you might consider adjusting your coverage:
- You got married
- You got divorced
- You started a family
- Your income changed
- Your health improved
- You lost weight or quit smoking
- You bought a house
- You paid off your house
- You started a business
- You borrowed money
- You retired
Depending on what has changed, it may be time to increase your coverage, supplement coverage with another policy, change to a different type of policy, or begin to move some money into savings or update your retirement strategy.
Have you updated your beneficiaries?
Did you get married or divorced? Did you start a family? It’s time to update your beneficiaries. Life can change quickly. One thing that can happen is that policyholders may forget to update the beneficiaries for their policies. A beneficiary is the person or persons who will receive the death benefit from your life insurance policy. If there is a life insurance claim, the insurance company must follow the instructions you give when you assign beneficiaries – even if your intent may have been that someone else should be the beneficiary now. Fortunately, this can be remedied.
How long has it been since you first set up a policy? How long has it been since your last insurance review? What has changed in your life since the last time you reviewed your policies?
Your insurance needs have probably changed as well, so now is the time to make sure you have the coverage you need.