Now that we understand how life insurance works and how much life insurance you need, let’s explore when you need to review your life insurance policies. Understanding when and why you need to review your life insurance coverage is important in order to ensure that your life insurance adjusts as your life does!
Here are some common life adjustments that often require you to adjust your life insurance coverage:
- Getting married brings along so many new and exciting ventures including sharing your finances with another person. Sharing your finances means that you will also be sharing your expenses, which means your new spouse is dependent upon your income for their financial stability. Your life insurance, or lack thereof, could dramatically affect the well being of your spouse when you pass on.
- Getting divorced also brings along many new financial ventures, and it is important to review your life insurance here as well. One important thing to focus on here is who your appointed beneficiaries are, as your spouse is often your beneficiary on life insurance policies.
- Child or Grandchild.
- A new addition to the family means a new dependent to be accounted for! Children or grandchildren are incredible blessings, however, they are also incredible expenses and incredibly financially dependent upon you. This is one of the most important times to adjust your life insurance to ensure that you’re little ones are also protected.
- Different health concerns or changes may also be important when reviewing your life insurance policy. Such changes could include a recent weight loss achievement, an overcome addiction, or other good news from your physician that you think might affect your life insurance rates.
- Financial Growth.
- The more financial success you have, the more coverage you will need in order to affectively replace your income when you pass. This means that if you recently got a big promotion, won funds, come into an inheritance, pay off your debt or just catch a big break, you need to adjust your life insurance coverage.
- Assigning a beneficiary to your life insurance policy is obviously important, but many people forget to update it as life changes. So, when a new marriage or divorce occurs, your beneficiary passes away, or you simply want to change your beneficiary be sure to reach out to your insurance agent and update your life insurance policy.
- Anytime you get a new mortgage, take out student loans, or even get a car loan you need to adjust your life insurance policy. No matter what type of loan you choose to open, you are officially signing yourself (and your loved ones) up for more debt. You need to make sure that your life insurance is able to cover whatever debts and expenses you incur now, so your family doesn’t have to struggle with them later.
When it comes to other insurance policies, we all assume that changes made to the insured object requires a call to your insurance agent. If you get a new house, you need to update your homeowner’s insurance. If you damage your vehicle, you need to update your auto insurance. If you upgrade your RV, you need to update your RV insurance. If you add new fishing equipment to your boat, then you need to update your boat insurance. Following this same pattern, if you have a major life change then you need to update your life insurance.
If you think that you need to update your life insurance policy or explore your life insurance options, then give us a call!