Review of Life Insurance Policies for the New Year

Reviewing the terms of your life insurance policy on a yearly basis is recommended. If you have been prompt with your premium payments, the policy will still be in effect, and it is quite likely that it has not undergone any significant modifications since you first acquired it. However, if significant shifts have taken place in your life, your life insurance policy may require revisions or no longer meet your requirements as it was originally intended to do.

Why Review Life Insurance Annually?

To ensure that your life insurance policies are always up to date and to provide you with the chance to purchase additional coverage if it becomes necessary, you should perform a comprehensive assessment of your policies at least once every year. The following is a list of critical factors to consider while conducting an annual evaluation of your life insurance.

Beneficiary Checkup

Your beneficiaries are the individuals or organizations that will be paid out by your life insurance policy after you pass away. If you have gone through significant life events in the past year, such as getting married, divorcing, or giving birth to a child, you might want to rethink how the proceeds from your life insurance policy will be dispersed after your passing.

For instance, if you purchased life insurance and named a sister as the beneficiary, but then got married and forgot to alter the beneficiary, your sibling, not your husband, would be the one to receive the benefits of the policy in the case of your passing rather than your spouse.

Health Changes for the Better

If you have just stopped smoking and are no longer dependent on nicotine, you may be eligible to have your insurance premiums changed from those applicable to smokers to those applicable to non-smokers. Because of this, the premiums can end up being significantly reduced.

You might also be eligible for cheaper rates if you have qualified as having a healthier lifestyle by, for example, shedding a large amount of weight and maintaining that loss for at least a year. After seeing major improvements in your health, you should evaluate whether or not it is in your best interest to shop for a new coverage.

Health Changes for the Worse

An existing life insurance policy cannot have its premiums increased by the insurer even if the insured person’s health has deteriorated. However, if you have term life insurance, now might be a good time to look into the conversion feature of your policy. This feature enables you to change your term policy into a permanent whole life or universal life policy without having to change your health class. Term life insurance is only valid for a predetermined number of years before it lapses. If you have significant health problems, getting a new insurance policy can cost you extra.

Growing Family

The primary objective of purchasing life insurance is to ensure financial security for those loved ones who are financially dependent on you in the event of your passing. When you have children, the number of individuals for whom you are responsible for providing for grows. You might wish to replace your present life insurance policy with a new policy that has a larger benefit amount, or you might want to add another new policy to your existing life insurance coverage in order to make up for any gaps in coverage.

Income Changes

If you have seen a big rise in your salary, you may wish to consider purchasing more life insurance in order to guarantee that the death benefits will be adequate to replace your income for a predetermined amount of time. For the same reason, if you have seen a big drop in your income and it is highly unlikely that it will rebound, you should consider reducing the amount of coverage that is included in your existing policy.

Our insurance advisor will be more than pleased to go through your life insurance policies with you and help you make any necessary adjustments.

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