Written by : Knowledge Centre Team
2025-08-02
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8 minutes read
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Life Insurance is an instrument through which you can protect your family’s financial future in your absence. Unfortunately, people in India either don’t have life cover or have less insurance coverage than required. Most often, its importance is valued after the demise of the policyholder. However, people are becoming aware of having enough cover.
A term plan is one of the cheapest life insurance options to provide sufficient financial cover to your family. Buying a life insurance plan cannot be a one-time decision. Over time, as life progresses, you should reassess your family’s life cover needs. There are multiple factors which influence your life cover need, or, in other words, your human life value.
Before starting the 3 most important life stages, when you should review your life cover, we first discuss why life insurance needs to evolve with you.
Key Takeaways
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Why Life Insurance Needs to Evolve with You?
Your life insurance policy should grow like your personal and financial journey. Every major change in your life, first job, marriages, and major financial decisions, affects your insurance needs. Reviewing your policy regularly ensures your loved ones are always protected.
- Life Events Drive New Responsibilities: As you move through life, your responsibilities increase. Marriage, parenthood, homeownership, and career growth increase financial obligations. These milestones increase your need for better insurance coverage to secure your family's future.
- Outdated Policies Lead to Risks: Failing to update your life insurance can result in insufficient coverage or unnecessary costs. You may be underinsured when your family needs maximum support or overinsured with premiums that no longer match your current needs.
- Timely Reviews Maximise Policy Value: By regularly checking your policy, you can adjust the sum assured, enhance your benefits, or add critical riders. These updates help you stay protected, keep your premiums reasonable, and ensure that your policy aligns with your evolving goals.
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3 Crucial Life Milestones to Reconsider Life Insurance
Life keeps changing, and your life insurance should change with it. Some important milestones in life call for a fresh look at your coverage.
1. Marriage & Childbirth - Family Life:
Before getting married, you have fewer obligations and financial dependency. However, post-marriage financial dependency of your spouse might increase your expenses, hence increasing your need to go for life cover.
Marriage also helps you dream bigger and have more financial goals jointly.. Therefore, increasing the cover to match the newfound goals is the logical step to ensure financial safety for these goals.
Similarly, the arrival of a newborn baby in a family brings joy as well as added responsibilities for parents. On one hand, expenses increase, and on the other child’s future goals also begin to take shape. As parents, you will try to do everything in your power to help your child realise her dreams.
Thus, the first step is to add these goals to your life cover. So, even if life doesn’t allow you to be a part of the journey, your children can make it through.
The best term life insurance plans allow you to increase the life cover amount at this crucial moment.
For example, iSelect Smart360 Term plan by Canara HSBC Life Insurance offers you the option to increase your life cover by up to 100 per cent of the base sum assured within the first five years of the policy. If you purchase a term life policy worth ₹1 crore, you may be able to raise your cover to ₹2 crores, depending on the insurer's terms and the specific plan options you choose. This allows you to enhance protection without buying a new policy.
2. Exponential Income Growth:
Income growth will not only put you in a different wealth status, but it will also improve your social status and upgrade your lifestyle. Thus, it only makes sense to match your available life cover with your new lifestyle and financial status.
It is important for your family that you increase your life cover to match your growth, so they don’t have to downgrade their lifestyle due to an unfortunate event. Although it may not be possible for you to increase your existing life cover after income growth, you can buy additional life cover to match the change.
3. Getting a Huge Loan:
If you want to build or purchase a house, start a new business, or expand an existing business, you might end up taking a loan. The moment you have this liability, you should also consider the contingency plan for your family’s financial safety.
You need to think of the risks which can put your family in financial distress and insure against them. Physical disability, life-threatening disease like cancer, or untimely death are such risks which could affect your income and loan repayment.
Therefore, if you can have sufficient life insurance cover for all these three risks, your family members will have an easier time moving on in life in case anything happens to you.
For example, considering current financial responsibilities, if you have a term plan of ₹. 75 Lakh, and you take a home loan of ₹ 50 Lakh, then to cover this additional liability, you should reconsider your insurance requirement and buy additional cover worth ₹. 50 Lakh.
How to Review and Update Your Life Insurance Policy
Regularly reviewing and updating your policy ensures that it continues to meet your financial needs and protects your loved ones effectively. As you cross different milestones, take time to align your policy with your evolving lifestyle and responsibilities.
- Review Coverage Amount and Beneficiaries: Check whether the sum assured reflects your current financial goals and obligations or not. As your income increases or your family grows, you may need to increase your cover. Also, make sure your nominated beneficiaries are updated based on your present relationships and preferences.
- Check for New Riders or Plan Upgrades: Many insurers offer optional benefits that can strengthen your coverage. Explore adding riders such as critical illness cover, accidental death benefit, or income protection. These features can enhance your policy’s coverage so you does’not need to buy one.
- Speak to a Financial Advisor: A financial advisor can help you evaluate your coverage in detail and recommend suitable changes. Their expert advice can guide you through complex decisions and ensure your plan stays aligned with your life goals and priorities.
- Realign Your Life Insurance to Match Your Life: Just having a life insurance policy is not sufficient; it should be large enough to cover your family’s financial future. Revisiting your life insurance needs from time to time is important and can be really helpful to your family members.
Also, don’t forget to add your spouse to your life cover, especially after childbirth, even if she’s not formally earning money herself. A mother's contribution to the growth and her child’s well being is immense, and thus, they have a significant life value for life insurance. Adding life insurance for the mother will ultimately help you take care of the children if anything happens to her.
Final Thoughts
Your needs evolve with time, and your life insurance should too. Regular updates to your policy help you stay prepared for life’s twists and turns. If you are adding a new family member or making a major investment, staying aligned with your current reality ensures your loved ones never fall short of support.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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