Is It Time To Upgrade Your Life Insurance Policy?

Thursday, June 1, 2017, 6:00 AM | Leave Comment

Your family’s financial needs change over the years, and you will have to make a few changes to keep up.

You need to go over your life insurance policy and make any necessary changes to ensure you have the protection you need.

You need to have a comprehensive life insurance policy that would replace your primary income if you were to die unexpectedly or if you were to become ill or incapacitated.

You need to review your coverage if the needs of your family change.

No one likes to think about life insurance, but you can’t pick a policy, pay your premiums and never think of it again. You should review your coverage on a regular basis and ask yourself if your policy is still adapted to your needs.

Here are five notable instances in which you should review your coverage.

  1. Life Events

    Your needs for coverage are going to change if you welcome a new addition to the family. This is also the case if you get married or divorced. Think about getting a second term policy if you need more coverage.

    If you have a term policy, you won’t be able to increase your face death benefit amount, which is why you will need a second plan. The more you wait, the higher your premiums will be since you will be considered as more of a risk.

    If you need a policy with less coverage, think about canceling your term policy after you have taken the time to shop around for a different option.

  2. Changes In Income

    If your income increases, think about upgrading your coverage.

    As a rule of thumb, you should carry life insurance for ten times your income so your family can live comfortably.

    If you live on a single income, make sure the other spouse is insured as well.

  3. Retirement

    Your needs are going to change once you retire. Your house will probably be paid off, and you won’t have to support your children anymore.

    Your term life insurance might no longer be relevant. You should look into replacing it with a health policy or with a long-term care policy.

    If your spouse is not working, you should think about dropping their life insurance policy.

    Cancel your term life policy if there are other things you should be spending your money on.

    There is no need to carry a life insurance that would replace your income once you no longer earns this income and can live off what you saved up for retiring.

  4. Your Health

    You can qualify for lower premiums if you quit smoking or if you have been losing weight.

    Your life insurance company will probably give you lower premiums if you can pass a medical exam.

    Think about working out, quitting smoking and making other healthy changes to qualify for lower premiums!

  5. Adding or Removing Beneficiaries

    If you are getting a divorce, don’t forget to make some changes to your life insurance policy since your ex-spouse will still be listed as a beneficiary.

    If your spouse were to die before you, you should change your policy and have your children listed as your beneficiaries.

    Review your policy and make any necessary modifications if you go through major life events to have the right people listed as your beneficiaries.

    Many life events would warrant changing your life insurance policy. You will have to purchase more coverage when welcoming a new baby and should think about reducing your coverage if your children are old enough to be on their own.

    Your independent agent can help you assess how much coverage you need and recommend when to increase or reduce it.

Bottom Line
You can upgrade your life insurance policy without having to spend a lot. There are affordable options available, such as opting for a term life insurance instead of a permanent policy.

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