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BLOG 09/10/2018

Understanding Life: 5 times to review your life insurance coverage


We’re big proponents of getting life insurance coverage sooner than later. But once you’re covered, then what? Just kick back and let it ride? Not exactly.

Your life changes, and there are times when your coverage should change, too. Here’s when we recommend reviewing your life insurance policy to make sure it’s covering everything it should be.

Anytime your financial situation changes

Got a raise? Landed a new job? How much you earn isn’t directly related to how much you pay in premiums, but it is related to how much your family needs to continue living the life you’ve built after you’re gone. If you’re able to provide your family with more than before, the last thing you want is to risk it all because you don’t have enough coverage.

If your family grows

Whether you’re welcoming a new baby or a new spouse and stepkids are entering the picture, double-check your coverage. More people in your home means more mouths to feed, more schools to pay for, and even higher debts to pay down, so you want to make sure that your life insurance matches the financial need.

When you finally buy that bigger house

You’ve been saving up for years for a place with a yard. Once you finally have the keys in your hand, make sure to protect your investment. Increasing your life insurance coverage can help your family handle a larger mortgage payment if something unexpected happens to you. It’s not just taking on a bigger mortgage, either. Any sizeable new debt, like medical bills, credit cards, or vehicles (cars, RVs, boats), is a good reminder to review your coverage level.

When your term life insurance policy expires

Twenty years seemed like a lifetime when you took out your life insurance policy, but now it’s already up for renewal. Before deciding what to do next, take a look at what you have saved and your financial obligations. If you still have little ones in the nest or a big mortgage payment, another term policy may be the way to go. If fewer people are depending on you financially now, a smaller final expense policy could be a better fit. Get the lowdown on both term life insurance and final expense policies here.

The same time every year

Pick any date you want – the anniversary of when your coverage began, your birthday, Arbor Day. It doesn’t matter when, just take a little bit of time to check out your policy and confirm it’s still active. For example, if you’re paying your premiums automatically with a credit card, an expired card could cause your policy to lapse unintentionally. Check your billing and account information; coverage level; and beneficiary, or the person who would receive the payout if you died, to make sure everything is in order.

Staying prepared for life

If you need to adjust your coverage, keep in mind that you may need to reapply to increase your policy amount. In some cases, you might be able to sign a form verifying you’re in good health and skip the full application. Your life insurance agent or carrier can walk you through the requirements for your policy.

Finally, give yourself some credit: You’ve already taken a big step toward protecting your family by getting life insurance coverage. Now it’s just a matter of checking in regularly to make sure that protection is protecting the right stuff. Not sure where to start? We’re here to help.

 

At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.