Your life insurance policy is the backbone of your financial stability and security. If something were to happen to you, how would it affect your loved ones? Is anyone dependent on your income? Would your loved ones be able to maintain their current lifestyle? These are the questions you should ask yourself regarding your life insurance policy.
Is Your Coverage Adequate?
Considering your coverage doesn’t begin and end at the policy’s conception. Things change as you get older. Your needs change with time and your coverage may no longer be adequate or suitable. As a result, there are many reasons why you should review your life insurance policy.
Your Death Benefit Isn’t Sufficient
The death benefit that may have seemed adequate when you were young and single may not be adequate for your current situation. Having a family produces a greater need for financial protection. You should always ask yourself if your death benefit will be enough to sustain those who depend on your income.
Your Policy Has No Savings Component
Not only should your death benefit be adequate financial protection, but you may need a savings component or cash value accumulation in your policy. Many young and healthy policyholders’ first life insurance policies are term coverages. Term coverages do not accumulate cash values and so you won’t be able to reap the benefits of reduced premiums, increased death benefits, or the ability to draw cash out of your policy when you truly need it. Ensuring that you have adequate coverage should never be a one-and-done process.
You May Have the Wrong Policy
What may have been a sufficient policy when you were younger may not be suitable for your needs today. The death benefit of your term life insurance policy may not be sufficient if you now have a family depending on your income. Many young people choose term life insurance policies because they are affordable. If affordability is no longer an issue and your family is dependent on your salary, then a permanent life insurance policy with a larger face amount may be best for you.
Maybe You Haven’t Considered Riders
Consider riders with your policy. Riders are added coverages for life insurance policies that provide added protection. There are various types of riders available for life insurance policies for things like disability, premium payment, your spouse, your children, and more.
There are even some riders you may attach to your current policy that will change the policy form entirely. Term riders may be attached to your permanent life policy if you are ever in need of securing a loan. On the other hand, there are riders in which you may convert your term policy into a permanent one, providing added protection and a larger death benefit. The suitability of your policy changes with time.
Your Needs Have Changed
In life, things change. A policy that was beneficial when you were younger may no longer be adequate for your current needs. Considering the type of policy you have and additional riders are key factors in determining how your policy can best work for you.
Make Your Asset Work For You!
When owning a life insurance policy, you need to nurture and grow that asset as if it were your home. Like a home, you may notice that you’d like some aspects of it to change so that it is adequate for your comfort. The same rings true with your life insurance policy.
Your policy is your property. When you own property, there may be a time when your child is moving out and you’d like to turn their room into a home office. Or, you may be turning your home office into a nursery because you’re adding a new member to the family. These types of changes should also be reflected in your life insurance policy. Consider policy review if you have any concerns.