You have already made the sound decision to purchase life insurance, but have you reviewed it recently to make sure that your policy is still suitable for you?
An essential part of a strong financial plan includes an annual review of your life insurance policy to check if the policy requires any adjustments such as beneficiary designation, and determine if you need any additional coverage.
Here are 6 reasons you may need to change your life insurance policy:
- Significant life events
Suppose you have experienced a significant life event in the past year, such as getting married, divorced, or having children. In this case, it is important to consider changing your beneficiaries to make sure your life insurance proceeds will be distributed appropriately.
If you don’t update your beneficiaries, a previously named beneficiary could still be legally entitled to the money you want others to receive!
- Job changes
Have you recently changed jobs? Or better yet, did you get a promotion? Once your family becomes accustomed to a higher income, you may want to increase your life insurance to allow them to maintain the same standard of living and comfort level.
If you’ve started a business, you’ll likely need additional coverage to help cover debts you have taken on to fund your new venture. Plus, since you’re now self-employed, you will no longer have access to employer-based life insurance.
- Added debt
If you’ve recently taken on added debt – such as a credit consolidation loan or a home equity loan – increasing your life insurance may be a good idea. Additional coverage can provide your loved ones with extra income to help pay off debt or even pay for basic living expenses if you pass away.
- Supporting family members
If your parents have moved in with you or into an assisted living facility, they may require financial support. Additional life insurance can help pay for this increased financial load.
Even if your children are ready for college or university, they’ll still need support from you. You can help secure their financial future with a life insurance policy to assist with tuition costs.
- Purchasing a new home
You don’t want to leave your spouse or partner with the burden of paying off a mortgage alone. Additional coverage can ensure they will have the funds they need after you pass and won’t be forced to sell at a stressful time.
- Changes in a loved one’s health status
If a loved one has recently had a change in health or a significant medical diagnosis, then it’s essential to review your life insurance coverage!
Life insurance can provide an extra sense of security in the ill-fated case that your loved one will need expensive medical treatment or in-home support after you are no longer around to provide.
If you have any questions about your life insurance coverage or want to make any changes, give us a call!
