When should you Review your Life Insurance Policy

Life insurance is a serious matter that should be considered by most people, not just the extremely wealthy. Life insurance offers protection for your family and peace of mind that if the worst were to happen, you are not leaving your spouse or children in a financial bind. Life insurance can provide a future for your surviving family.

Your first life insurance policy doesn’t have to be your last. Whenever you take out a life insurance policy, you take into account your current circumstances, lifestyle and income. Over the years this is likely to change. As you grow older, your asset base may improve, you might have more children, less (or more) debt. Your financial situation and needs are not the same at every stage of your life. In fact, it is important to review your life insurance policy whenever you have a life-changing event.

Any growth in overall assets needs to be factored into your life insurance policy. If you have purchased property and carry a mortgage, for instance, your policy should cover the repayment of this property if the event of your death. The goal is to eliminate the burden from your inheritors. If and when you own the property outright, however, you may be able to lower your insurance policy and premiums because you no longer need the same amount of protection.

Most parents want to provide for the best for their children, and if they are not around to do it, life insurance will accommodate for such needs as a college education. The more children you have, the more insurance you may need. As your children grow up, this can be adjusted. If they are independent adults, you won’t require the same levels of protection as when they were still young children.

Changes in your income may also cause you to review your life insurance policy. If you’re income has decreased for one reason or another, you may need to lower your insurance premium in order to have better monthly cash flow. If your income grows, you might want to increase the size of your policy, which affects how much it will cost you.

Insurance companies make changes to their policies from time to time. If they do, they are legally obligated to notify you in advance. This is another opportunity to review your current policy to see if it still meets the needs of your current financial situation.