There are times in life when you will have to re-evaluate your life insurance to make sure you are covered adequately and that you hold the suitable policy for your situation. Not reevaluating your needs might imply that you wind up being underinsured. Here are the primary events that will trigger a review:
New Job or House
As you move to a new job, you could realize that the new employer will provide more or less coverage than your previous employer. It then means that you might have to get supplemental coverage or reduce the current insurance.
When the new job comes with a higher salary, you might consider increasing your life insurance cover. Also when buying a new house, you will normally want to review your insurance for covering the mortgage. Doing so will keep your spouse and children from having to sell off the house when they do not have some income available.
Expecting or when Adopting Children
Usually, as the family starts to grow most people who are not insured are triggered to get life insurance. For those who already hold a policy, it may be time to update their insurance. Normally, you will have to increase the cover, thus protecting your kids financial future. This ensures that the education and living expenses will be covered should you pass on when they still are dependent on you.
Re-evaluating your insurance coverage does not have to take long. Once each year have one day on to go through your circumstances and make any needed adjustments. You might find that some events you had not considered (like children going to college or becoming independent) will mean that you do not need much insurance.
Marriage and Divorce
You might consider increasing your cover when your partner will be dependent on your salary for their present living standard. This will help cover their expenses and repay any big debts such as a mortgage. Together with your partner, you will need to take the time to review your expectations on your insurance cover depending on your present finances. If you already have kids, you will need to consider whether you need to be included as a beneficiary on their insurance policy.
Life policy cover will differ for individuals in second marriages, especially when there are step kids to consider. The previous spouse usually should be removed as beneficiary, and you also have to think about any alimony and child support payments. When getting a divorce, consider reviewing your beneficiaries and make sure that any kids you have together are supported adequately.
When your employer is offering you a life insurance cover, you may have to update the coverage once you are set to retire. When you already hold whole life policy cover, this will often help you manage the retirement costs. When you are concerned about your likelihood of getting coverage, you could also consider a life insurance policy no medical exam. Such policies often will cost more since the insurer is assuming more risk.