If you’ve owned the same life insurance policy for a while, chances are that your needs have radically changed. Whether you’ve gotten married, had kids or your kids have left the nest, it’s important that your life insurance coverage reflect your current needs. So, it’s prudent to review life insurance regularly and if you aren’t sure what your next steps are, you can ask for help from a trusted life licensed insurance adviser.
When and why should I consider a review my existing life insurance policies?
If in a new relationship: While single when you took out your current policy, you may now be living with a partner or even married. Conversely, you may have been married and are now divorced or with a different partner. It’s important to not only evaluate the level of coverage you have, but also to update any of your named beneficiaries to include your new partner or remove old ones
Birth of child: The addition of a child to a family can make a huge difference to the family finances. The additional mouth or mouths to feed should be reflected in the amount of coverage you have.
Additional financial commitments: You may have taken on more financial commitments, such as a mortgage or a car loan. With this increased debt to deal with, your family could be left without enough benefit to cover necessary costs and commitments in the event of your death. Make changes to your life insurance accordingly so that the level of coverage is adequate and takes into consideration these increased financial commitments.
An increase in income levels: An increase in income means that you likely have become used to living on a higher income, become used to a different lifestyle, plus may have taken on increased financial commitments in line with your higher income levels. This may mean considering an increase to your current coverage.
Reduced debt load: Your insurance may decrease as your debts are repaid and you have lower financial commitments to meet in the future.
Changes to beneficiaries: If the main beneficiary of your life insurance policy were to inadvertently pass away, you may have to name someone else as your primary beneficiary. Another scenario is when your main beneficiary is no longer a part of your life, such as in a relationship breakdown. In this case you would again need to consider making changes so that the death benefit goes to the person you want it to.
Adding to all the above: The coverage you have may be too expensive, such as term coverage that was gone through several renewals. You may now need less term coverage but more level cost permanent coverage. You may have a need to conserve your estate for your heirs from debt or tax shrinkage or to equalize it to compensate any children not involved in the family business or farm.
Have your old policies reviewed to determine if they are still of good value. If you’ve lost contact with your selling advisor, a new advisor can take over as agent of record.
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