If you have taken out a life insurance policy, so much the better! But your job is not done. Whether you have a term life insurance policy, a capital accumulation plan, or any other type of life insurance, you should periodically review coverage to ensure your family has sufficient financial protection.
If you don’t know how often you need to review the term life insurance plan, you can follow the thumb rule of reviewing it every year. The annual life insurance policy review should be a regular financial practice. After all, you don’t want to find yourself in a situation where you’re underinsured or paying more than necessary.
Life is constantly changing and you need to adjust your insurance coverage accordingly. Below are some important events that may occur in your life and you may need to review your term life insurance plan and make necessary changes as needed.
Your state of health has changed
If your health deteriorates or you are diagnosed with a critical illness during the policy period, you may want to review your term life insurance policy and see if there is enough coverage to help support your family. daily needs in case something happens. you.
Additionally, you may consider purchasing a rider for additional critical illness protection. This will help your family get an extra payment.
You incur a debt
If you have taken out a large loan like a home loan or business loan, you may want to review your life insurance policy and increase coverage. If something happens to you, the last thing you want for your family is to bear the burden of paying off the loan. By increasing coverage, your family can use the amount to pay off the loan and be debt free.
You are getting married or have children
If you got married or had a baby recently, you would have the added responsibility of caring for the new family member. Now might be a good time to review your term insurance plan, increase coverage, and add your spouse or child as one of the beneficiaries. If you are not able to increase coverage right away, you can consider doing so after 2-3 years.
Increasing coverage will help secure your family’s financial future. If something happens to you, your family may be financially independent.
You want to modify or add a beneficiary
Sometimes you may want to change the beneficiary of your life insurance your children to your spouse or any other family member who is financially dependent on you since your children have started earning a living. You may want to add your parents as primary beneficiaries. Regardless of the situation, when changing or adding a beneficiary, it would be helpful to review the policy coverage and increase or decrease it based on your current financial situation.
It is essential to periodically review your life insurance coverage. It helps you make necessary changes to the insurance plan so that you have a solid financial cushion for your family in your absence.