For most of your adult life, you may have had the protection of life insurance to help safeguard you and your family. But as your life changed, so did your family’s needs and financial goals. With every transition and milestone, you should take the time to reexamine your life insurance policy to make sure you have the proper coverage.
Here are 5 reasons to take a second look at your policy:
- It’s time for your annual review.
Each year, you should get an annual health checkup with your doctor to make sure you’re in good shape. The same thinking applies to your life insurance policies. Generally, it’s a good habit to review your policy every 12 months. This will help you identify where you are today versus what you may need in the future.[i] You can also ensure that nothing has changed in the market to affect your coverage. You may find that you have adequate coverage and do not need to change any details, or that you need to make more adjustments than you initially anticipated. You’ll only know what strategy to pursue if you complete an annual policy review with your financial advisor.
- You no longer have financial dependents.
Retirees often revisit their life insurance because they no longer financially provide for their loved ones.[ii] When your children or grandchildren are young and depend on you financially, protecting your family with life insurance makes sense should anything happen to you or your spouse. Once children and loved ones move out and begin managing their own financial lives, they will no longer be as financially affected when one of you dies. As a result, you may want to review your policy to help ensure you have the proper coverage.
- You are newly married or divorced.
A change in your marital status affects how many people you must account for in your life. Whether you have married, remarried, or divorced, your needs are different. When you experience one of these changes, you’ll want to revisit your life insurance policy to ensure it accurately reflects your marital status and financial profile.[iii]
- You and your spouse are no longer employed.
While you were working, you may have had life insurance coverage through your employer. Once you left your employment, your policy may have lapsed, requiring you to consider other insurance.[iv]
- Your beneficiaries changed.
Whether you want to name a new grandchild or remove someone who has passed, revisiting your life insurance to ensure your beneficiaries are up to date is essential.[v] Any time you have a change in your beneficiaries, you should make adjustments to those particular policies. Failure to make policy changes may block access to funds and put in jeopardy the money you’ve invested during the policy’s duration.
Overall, your unique financial needs will drive what strategies make sense for you. A variety of considerations will affect whether you need to revise your life insurance policy beyond what we’ve shared here. To learn what strategy is right for you, feel free to contact us. We’re happy to discuss the options available to you as you pursue your financial goals.