There are times in your life that you need to review your life insurance to make sure you are adequately covered and you have the right policies for your circumstances.
Failing to reevaluate your needs can mean that you will earn money under insurance – something that many American families face, with an average insurance gap of almost $ 320,000.
This is the main event that should trigger reevaluation:
1. Marriage and Divorce
If your spouse will rely on your income for their current standard of living, you may need to increase insurance coverage to meet their expenses and pay off all major debts like your mortgage.
You and your spouse need to take the time to evaluate your life insurance expectations based on your current finances. If one of you already has children, you may need to discuss whether you should be added as a beneficiary of their life insurance policy.
While many people get married in their 20s, the average age for the second marriage is 32.6 for women and 35.2 for men. Life insurance will be different for people in the second marriage, especially if there are children steps to consider. Former spouses should normally be issued as beneficiaries, and you also need to consider child payments and any benefit payments.
If you are divorced, you may want to review your beneficiaries and ensure that any child you have with you will still have adequate support.
2. Expect or Adopt Children
Adding a child to a family is usually one of the biggest triggers for uninsured people to buy life insurance. If you already have a policy, you should update your insurance.
Typically, you need to add to your cover, protecting your children’s financial future. This will ensure that their living and educational costs can be covered if you continue while they are still dependent on you.
3. New House or Job
When you change jobs, you may find that your new employer may offer more or less insurance from your last employer. This means you need to buy additional coverage or reduce your life insurance right now.
If your new job includes a raise, you may also want to increase your life insurance coverage. And if you buy a new home, you usually want to reevaluate your life insurance to cover the mortgage.
This will prevent your spouse or child from selling the house if they no longer have your income.
If your boss gives you life insurance, you’ll need to update coverage when you’re ready to retire. If you already have all life insurance, this can often help you cover pension costs.
If you are worried about the possibility of getting the insured, you can also see life insurance without medical examination. This policy will often be more expensive, because insurance companies are more risky.
5. Every year
Reviewing your life insurance does not take long. Mark one day on your calendar once a year to see your situation and make the necessary adjustments.
You may find that events you have not considered (such as adult children becoming independent or going to college) can mean that you no longer need that much insurance.