Reviewing Your Life Insurance Annually
Some things can take a "set-and-forget" approach, but your life insurance shouldn’t be one of them! A lot can happen in a year. Think about the changes you’ve seen in your own life: maybe you’ve taken a new job, expanded your family, bought a house, or any number of things. Since life insurance provides vital financial protection to your family should anything happen to you, it’s important to review it annually to ensure you have sufficient coverage aligned with your ever-evolving life circumstances. Let’s look at the key factors that make reviewing your life insurance annually a smart choice.
Why Should You Review Your Life Insurance Annually?
1. Job Change
When you start a new job where your earnings are projected to increase, make sure to review your life insurance policy. As your income rises, your spending habits may also change, so ensure that your policy can still provide adequate coverage for your family’s growing financial needs. This same principle applies to a substantial raise or promotion at the same company too.
2. Starting a New Business
Starting a new business means incurring more financial and tax obligations. So, whether you’re starting an online store or establishing a brick-and-mortar business, ensure that your insurance coverage can meet your needs.
3. Change in Beneficiaries
Every year, you should check whether your list of beneficiaries still has the people you want to benefit from your life insurance policy.
4. New Marital Status
Whether you’re recently married or have gone through a divorce, it’s important to update your life insurance policy to match your current marital status.
5. Family Growth
Whether you’ve had a baby or adopted a child, it’s important to adjust your life insurance policy accordingly.
6. Home Purchase
If you’ve recently purchased a house, review how you can adjust your insurance policy to ensure that your beneficiaries can cover the cost of your new property in the event of your death.
7. Health Status Change
Updating your life insurance may not be the first thing you think of when you experience a health change, but it’s also an important time to review your policy.
Life Insurance Policy Review Checklist
These life changes are just a few of many times that it makes sense to review your life insurance. When reviewing your policy annually, it’s best to make the necessary changes to ensure that it still addresses all of the factors below:
- Your death benefit is sufficient to cover the current financial needs of your beneficiaries in the event of your passing.
- Your beneficiary list includes everyone you want to benefit from your life insurance.
- The type of life insurance policy you have still meets your needs and expectations.
- Your premium payments are still manageable and affordable.
- Your policy isn’t going to lapse soon.
- You’re taking advantage of any new coverage options that your insurance company may offer.
One of the best ways to make sure your loved ones are fully protected is to work with a licensed insurance agent who can walk you through the entire process.
