The Importance of Doing an Annual Life Insurance Policy Review
As we go through life, our needs change, including our insurance needs. That’s why it’s so important your review your life insurance policy annually and ensure it still meets your needs. Also, make sure it provides the right level of coverage for your loved ones. In this article, we’ll explore the reasons why doing annual life insurance policy review is so important.
- Changes in life circumstances: Our circumstances change as we go through life. We may get married, have children, buy a home, or change jobs. All of these life events can impact our life insurance needs. For example, if you have children, you may want to increase your coverage to ensure that they’re provided for in the event of your untimely death. Alternatively, if your children have grown up and left home, you may be able to decrease your coverage to save money on premiums. Doing an annual review allows you to assess whether your current coverage is still appropriate for your current situation.
- Changes in a financial situation: Our financial situation can change from year to year. You may have received a raise or a bonus, paid off a debt, or started a new business. These changes can impact your life insurance needs. If you’ve received a raise, you may be able to afford higher premiums, allowing you to increase your coverage. Alternatively, if you’ve paid off a debt, you may be able to decrease your coverage to save money. Reviewing your policy annually can help you ensure that you have the right coverage at the right price.
- Changes in health: Your health can change from year to year, and this can impact your life insurance premiums. If you’ve developed a health condition, you may find that your premiums have increased significantly. Alternatively, if you’ve improved your health, you may be able to negotiate lower premiums. Reviewing your policy annually can help ensure you get the best possible price for your coverage.
- Policy features and benefits: Life insurance policies can vary widely in their features and benefits. For example, some policies offer a cash value component, while others do not. Some policies offer riders, such as accidental death coverage or long-term care coverage, while others do not. Reviewing your policy annually allows you to assess whether your policy still meets your needs and whether there are any additional features or benefits that you may want to add.
- Market changes: The insurance market is constantly changing, and this can impact your life insurance policy. For example, if interest rates have gone down, your policy’s cash value may have decreased. Alternatively, if interest rates have gone up, you may be able to earn a higher return on your policy’s cash value. Reviewing your policy annually allows you to stay up-to-date with market changes and ensure that your policy is still providing the best possible value.
- Family changes: Your family situation can also change from year to year. You may have had a new child, gotten divorced, or experienced the death of a loved one. These changes can impact your life insurance needs. For example, if you’ve gotten divorced, you may want to remove your ex-spouse as a beneficiary on your policy. Alternatively, if you’ve had a new child, you may want to add coverage for them. Reviewing your policy annually allows you to ensure that your policy reflects your current family situation.
- Age: As we age, our life insurance needs may change as well. When we’re young, we may need more coverage to provide for our children if we were to pass away. As we get older, our children may be grown and financially independent, and we may no longer need as much coverage. Additionally, as we age, our premiums may increase. Reviewing your policy annually allows you to ensure that you have the right coverage for your current age and life stage.
