It’s always important to review your life insurance policy, but how often should you review it? In this blog, we’ll explore how often you should review your life insurance policy as well as how to review it successfully.
When to review a life insurance policy
Generally speaking, you should review your life insurance policy once a year. This annual review helps ensure that your life insurance policy is still relevant. However, there are some other times you should review your life insurance policy in addition to an annual review, let’s break them down.
Relationship status changeGetting married? Now that you’ll be sharing your finances with another person, you may find your life insurance needs change. Several couples rely on two incomes to pay the bills, so if you died unexpectedly there’s a chance your spouse would financially struggle. As a result, it is advised you review your life insurance when getting married.
Getting divorced or a recently widowed? Consider reviewing your life insurance policy for the same reasons. Things such as beneficiaries are important to reevaluate during relationship changes, especially if you find yourself going through a divorce or recently widowed.
Birth or adoption of a childIntroducing a child into your life is a big deal, and can be very expensive. Whenever bringing a child into your life, you may want to consider revising your life insurance coverage. You may find you want to add coverage for your child or you may want to modify your beneficiaries. Whatever you decide, having a child is an important time to review your policy.
New homeGetting a new home is a major investment, and a milestone that calls for a life insurance review. When reviewing your policy, you may want to ensure that your coverage amount is also enough to pay off a mortgage in the event something happens to you.
Health changeWhether you’ve recently discovered something new about your health or are starting up an intense workout regimen, all health and lifestyle changes call for a review of a life insurance policy. Discovering a health issue can call for a total life insurance review.
How to review a life insurance policy
When reviewing a life insurance policy, you should always start by reviewing the basics. But what do the basics entail?
Type of policyThe first step in reviewing your policy is to make sure you know what type of policy you have. With so many different types of life insurance policy to choose from, it’s important to know what type of life insurance policies you have, so double check.
Insurance carrierWho provides your insurance? Keep track of the company and the customer service number for your policy. Having this information on hand can help ensure you have everything you need to resolve any policy issues or if you need to modify your policy.
Policy numberRain, snow, or shine, you will always need your policy number. A policy numbers is assigned to a policy and helps identify you to your insurance carrier. So, if you ever need to call for information on your policy, make sure you have your policy number on hand.
Date issuedIt’s important to know when your insurance was issued, especially with life insurance. Some life insurance policies have an expiration date, so staying on top of when your life insurance policy was issued and when it may expire is key to ensuring your insurance never lapses.
Benefit amountHow much is your benefit again? Make sure to review your benefit amount and how benefits are distributed. Consider contacting your life insurance carrier to see if you are eligible for any increases in benefits.
Premium requiredAll life insurance policies require the payment of a premium. Keeping track of how much the premium is and how often it has to be paid can help you establish if your life insurance is right where it is, can be expanded, or if it may be time to switch carriers.
InsuredThe insured is the person the benefits apply to. Is it you, your spouse, your child? Make sure you know which policy is for who.
BeneficiaryFor life insurance, you need to keep a list of your beneficiaries. This is important for a number of reasons, as keeping track of your beneficiaries will ensure your benefits go to the right place.
Other things to consider when reviewing a life insurance policy
Now that you know the basics about reviewing your life insurance policy, there are some other things you should consider when reviewing. These are more specific to life insurance than the previous list. Other items you may want to keep track of during your life insurance policy review include:
- Any additional riders included on your policy
- Total death benefit amount
- Cash value (if you have it and how much of it you have)
It’s really quite simple…
While keeping track of your life insurance policies can be a daunting task at first thought, it certainly doesn’t have to be. Keeping on track with your annual life insurance policy review and reviewing your policy during the major life milestones will help ensure your policy is up to date. Make sure to review your life insurance basics, and keep on top of any unique features your life insurance policy may have, such as additional riders and cash value.