Purchasing a life insurance policy is a great way to ensure protection for your family's financial future in case of your absence. While long-term planning is important, a life insurance policy that was bought five to seven years ago may no longer offer the right coverage for your current situation and even your future financial needs may look different. Therefore, experts suggest reviewing your insurance coverage every year. In addition, it is important that you reassess your life insurance cover whenever there is a major change in your life.
When reviewing your insurance coverage, these 4 simple questions can help you figure if there is a need to talk to your insurance professional about making a change in your insurance coverage. Start by asking yourself these questions to help assess your changing insurance needs:
1. Have you gotten married recently?
Getting married changes everything, you have more responsibilities and an added reason to plan for the future. If your spouse is not working, you might want to review your life and disability insurance coverage, while you must consider adding your spouse to the same policy or buying a new one if they also contribute in the family’s finances. When both the spouses are working, you have to keep your family prepared in case of loss of one spouse’s income due to an unfortunate event.
2. Have you had a baby or are about to have one?
If you have welcomed a new member to the family or plan to welcome one soon, it is important to review your life insurance policy. You may want to increase your cover to match your survivors’ expenses in case the unfortunate happens. In addition, child plans can be a great way to start building a corpus for your child's college education, marriage or fulfilling their dreams later in life. Plus, do not forget to update the beneficiaries in your current policy.
3. Have you experienced a significant change in your income?
If you have switched a job recently and your current employer doesn’t offer sufficient group insurance benefits, you must consider upgrading your individual insurance, or buying a term insurance plan in case you don’t have one. In the case you have had an income increase you may have to take up additional financial commitments; this is when you should make sure to review your insurance to ensure it is adequate to maintain those commitments. On the other hand, if you’ve experienced an unexpected decrease in income, you may want drop some riders to cut on your life insurance premiums.
4. Do you plan to retire in the near future?
When you near retirement, it is important to have adequate life insurance cover to ensure your family is always financially protected. You should re-evaluate your life insurance policy and also invest in saving plans that can help you build a corpus for your retirement, so you retire in peace.
The above mentioned are among the most common reasons for reassessing and adjusting your insurance coverage. In some cases you would require to purchase new policies aligning with your specific needs, for instance when you stop smoking, you can save considerably on life cover premiums. Insurance needs vary from person to person and the terms of coverage may vary from company to company, therefore it is always best to consult with an insurance agent to make sure you’ve got the right type and amount of coverage.
Annual Insurance Checkup:
Conducting an annual insurance checkup is a smart idea. You must reconsider the type of coverage you have and might need in the future, to your coverage amount. Do these activities even if you don’t think there have been any significant changes in your lifestyle, or family circumstances. This can help you ensure that your family stay adequately protected and avoid any unpleasant surprises if they ever have to file a claim. To stay on track, do an annual review around the same time each year; your birthday month is a great time to start, or you can do it during the month of January, to start the New Year off on the right foot!
When was the last time you reassessed your Life insurance cover? Although many people choose to stick with their type of policy, there sure is merit to be found in shopping around and reviewing your policy from time to time. Reassessing your life Insurance policy at different times during its lifetime could also potentially help you save some money, if your circumstances have changed for the better. There is an abundance of more beneficial life and term plans available on the market for you to choose from, for instance, iSelect Star Term Plan, which offers spouse cover, multiple premium payment options, whole life cover, tax benefits all under one comprehensive policy.
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