After buying your life insurance policy, you may be tempted to ‘set it and forget it’, leaving the policy untouched for years. Reviewing your life insurance, though, is crucial to help ensure that life’s many changes haven’t left you and your family with a gap in the amount of coverage you need.
Of course, you probably have your fair share of questions about policy review. How often should you look over your life insurance? What circumstances might require changing your life insurance policy? How do you even access your policy? Read our brief guide to find out.
In a perfect world, you would review your policy at any time that your life and circumstances change, whether that was once a decade or a few times a year. However, since your life insurance policy is unlikely to always be top of mind, consulting your policy on a regular basis may be a smarter play. Many financial advisors and insurance experts will recommend that you do a policy review on an annual basis. And that’s a good rule of thumb. In reviewing your policy each year, you can reflect your family’s current needs.
Simply put, you should review your life insurance policy each time there is a change in who depends on you or how much you have to protect. A change in dependents could be a new baby, a child becoming an adult or a new marriage, while changes to your assets could be a second home or growing retirement accounts.
Here are ten common reasons you may need to update your policy:
1. You’ve gotten married or remarried.
2. You’ve gotten divorced.
3. You’ve had a baby.
4. Your children have left home, becoming financially independent.
5. You’ve bought a new house.
6. You’ve sold your house.
7. You need to change your beneficiary.
8. You’ve started your own business.
9. You’ve recently begun to care for your elderly parents.
10. You’ve had a change in your health (i.e. you’ve quit smoking or lost weight).
While a life change may cause you to make an update to your life insurance policy, it’s not the only reason to schedule an annual review.
Reviewing annually who you designated as your beneficiary is a good idea. You can ensure that their information is still correct, and decide if you need to change or add another beneficiary. If you already have multiple beneficiaries, reviewing how much of your death benefit each person may receive can be helpful in confirming that your policy will be able to help protect your loved ones in just the way you intend.
Your annual policy review is also a good opportunity to check over your own personal details. Make sure that not only your name, address and phone number are correct, but that your billing information is accurate still as well. This is especially important if you’ve moved recently or had to get a new credit or debit card.
Reviewing your policy with your agent can be helpful in understanding all of the options available to you now. You may be able to convert your term policy if a permanent policy better suits your current circumstance. You may also be able to add additional riders to your policy or make other changes. Of course, an agent can help you make these determinations.
You should have copies of your policy in your home, so reviewing it on your own is as simple as taking a few minutes to read it over. If you’d like the help of a licensed agent or you can’t locate your documents, get in touch with the company that owns your policy. Your agent can help advise you on any updates or additions to your policy that would be beneficial.
You bought life insurance to help protect your family, and that hasn’t changed. Reviewing your life insurance policy regularly is a great way to help ensure that your policy is still suited to cover you and your family’s ever-changing needs.
Contact us today to schedule a policy review.