It is a good policy to review your life insurance every year. If you have paid your premiums on time, the policy will still be there, most likely without any material changes since you purchased it. However, if major changes have occurred in your life, your life insurance policy may need adjustments or no longer suit your needs.
Why Review Life Insurance Annually?
Conducting a thorough review of your life insurance every year helps you keep your policies up to date and gives you an opportunity to add additional coverage if needed. The following are some important reasons for a life insurance annual review.
Your beneficiaries are the people who will receive the death benefits from your life insurance. If major changes have occurred in your life during the past year, such as marriage, divorce, or the birth of a child, you may want to change how your life insurance proceeds will be distributed. For example, if you named a sibling as your beneficiary, then later got married and neglected to change the beneficiary, your sibling would receive the life insurance benefits in the event of your death instead of your spouse.
Health Changes for the Better
If you have quit smoking and are now nicotine-free, your smoker’s rates can be changed to non-smoker rates in most cases. This can result in substantially lower premiums. If you have lost a significant amount of weight and kept it off for at least a year, you may also qualify for lower premiums. In some cases, it may be to your advantage to purchase a new policy after significant health changes for the better.
Health Changes for the Worse
If your health has deteriorated, the life insurance company cannot raise the premiums on an existing policy. If you have term life, however, it may be a good time to look at the policy’s conversion feature which allows you to convert a term policy to a whole life or universal life permanent policy without changing your health class. Term life insurance expires after a certain period of time. Major health issues could make purchasing a new policy more expensive.
The main purpose of life insurance is to provide for the loved ones who depend on you in case of your death. When children are born, the number of people you want to provide for increases. You may want to replace your existing life insurance policy with a new policy that has a higher benefit amount or supplement your current life insurance with an additional new policy.
If your income has increased significantly, you may want to buy more life insurance to ensure the death benefits are sufficient to replace your income for a certain period of time. For the same reason, if your income has decreased significantly and will probably not recover, you may want to decrease the coverage on your current policy.
Our agent will be happy to review your life insurance policies with you and assist you in making any changes needed.
It’s the perfect time to remind ourselves to plan ahead for the ones we love.