Like most things in life, your life insurance policy should be reviewed periodically to ensure that it still meets your needs. How often you should review it depends on a few factors, such as the type of policy you have and how much coverage you currently have. In this blog post, we will discuss when is the best time to review your life insurance policy, and what you should look for during that review.
Quick Note
Like other aspects of your financial well-being, you don’t want to take a “set it and forget it” approach to your life insurance policy.
As a general rule of thumb, it’s a good idea to review your life insurance with your life insurance agent at least once a year. The life insurance review is a way to make sure that you have the right kind and level of coverage to protect your loved ones. And if you have permanent life insurance, it’s a good opportunity to make sure it’s helping you meet your overall financial goals.
A life insurance review is also the perfect time to learn about any new coverage options your insurer recently announced; to discuss any concerns you have about the rate you’re paying; and to take action before a policy expires.
Good Time To Review
Your life insurance often needs to change as your life changes. That’s why you’ll want to schedule a life insurance review after a major life event. Life events that should trigger a review of life insurance include:
- Getting married
- Getting divorced
- Buying a house
- Having or adopting a baby
- Accepting a new job
- Receiving a substantial raise or promotion
- Taking out a mortgage or other loan
- Refinancing your home
- Paying off your mortgage
- Buying a business
- Selling a business
- Receiving an inheritance
- Having a loved one require long-term care
- Becoming disabled
- Becoming an empty nester
- Experiencing a death in the family
- Retiring
An often overlooked reason for scheduling a life insurance review is experiencing a change in health. A turn for the worse is often a reason to increase your coverage or to examine additional coverage opportunities. (Just know that a new policy may cost more if you’re facing a health challenge.) That said, rest assured that you’ll be able to continue the coverage you already have in place regardless of your health.
On the flip side, an improved health outlook from losing weight, exercising more, quitting smoking and getting control over an issue like high blood pressure might help you get a better rate. The same applies if you recently quit a dangerous hobby like mountain climbing or left a risky job like being a roofer.
Why Working With An Agent is Crucial
While you can technically review your life insurance policy on your own, we highly recommend working with a licensed life insurance agent. There are two main reasons for this:
An agent is an expert on life insurance. They understand the product and how it works. This means they can help you find the right policy for your needs and budget.
An agent can help you understand your coverage. They can explain what your policy covers and how it works. This is important because most people don’t really understand their life insurance policies.
In short, working with an agent will save you time, money and stress. And that’s worth its weight in gold.
How to Review Your Coverage
Now that you know when to review your life insurance, let’s take a look at how to do it. Here are four steps we recommend following:
Get organized. Gather your current policy, any old policies, your beneficiary forms and any other documents related to your coverage. This will make the review process much easier.
Check your coverage. Make sure you have the right kind and amount of coverage. You can use our life insurance needs calculator to help you determine how much coverage you need.
Compare rates. Once you know how much coverage you need, it’s time to start shopping around. Compare rates from multiple insurers to make sure you’re getting the best deal.
Make changes. If you find a better policy, make the switch. If you need more coverage, add it on. And if you no longer need a certain type of coverage, drop it from your policy.
Reviewing your life insurance is an important part of being a responsible adult. By following the steps above, you can be sure you have the right coverage in place – just in case. So don’t wait. Schedule a life insurance review today.
Your life insurance often needs to change as your life changes. That’s why you’ll want to schedule a life insurance review after a major life event.