Updating Your Life Insurance Policy
Buying a life insurance policy is an important decision. But, it’s also important to make sure your life insurance policy is Up-to-date. That means you should review your life insurance policy each year and make sure it meets your needs.
Our Guide to Updating Your Life Insurance Policy
- Explains mistakes to avoid when making policy changes.
- Identifies coverage changes that may help you.
- Let’s you know when to review your life insurance policy.
Mistakes You Can Avoid
Life insurance is an important purchase for most everyone. Many times it is in your best interest to have one policy, instead of several policies with lower limits of coverage.
Many people make the mistake of buying a life insurance policy with a lower limit of coverage than what they really need to properly protect their family. If you know you need more protection, it may be less expensive to purchase higher limits now, instead of waiting. In the future your health may change and the cost may be higher, if you can get more coverage.
Some insurance agents may suggest you use cash value that has built up in a whole life policy you own to purchase another policy. The agent gets a big commission and you lose the cash value that has built up in your whole life insurance policy over the years.
How to Plan Your Term Life Insurance Policy
It’s important to know your current needs and your future needs for financial security to protect your loved ones. Term insurance offers you the option of buying the maximum amount of protection at the lowest expense.
You should consider your family’s needs – your spouse, children, monthly expenses, home mortgage, college tuition, your spouse’s retirement and living expenses.
Term life insurance offers you guaranteed rates and level coverage amounts for 5, 10, 15, 20, 30 or 40 years. That way you know how much your annual premium will be, and you’re certain how much protection your family has with your life insurance policy.
When to Update or Adjust Your Life Insurance Policy
There may be many life changing events that require you to consider updating your life insurance plan. Whether you get married, have a new child, buy a new home, or change jobs, these are times you may want to increase your life insurance coverage.
When you retire or your youngest child has finished college or left home, you may be interested in reducing your life insurance.
In later years, after retirement, you may be interested in lowering your insurance costs to allow for more disposable income.
These are some of the life changing events that affect your need for life insurance.
It’s important to review your life insurance plan at least once per year. You’ll want to consider your financial obligations, debt, your financial goals and your family’s lifestyle and changing needs.
Learn more about how term life insurance works.
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