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When to Re-evaluate Life Insurance

Most of us never shop for life insurance, relying solely on the coverage we get through our corporate benefit packages, or if we do purchase a life insurance policy, we make payments but never think to upgrade or alter our coverage.

The folks at LIFE, the Life and Health Insurance Foundation for Education want all of us to rethink that habit. According to them, it’s not just the obvious life changes – like getting married or divorced, or having a baby – that should prompt a closer look at our policies. So what are all the changes that should trigger insurance examination?

Here’s the list:

  • Getting married – because now there are two lives to insure.
  • Having a child – this involves a change in beneficiary, as well as covering the new addition.
  • Buying a home – it increases your net worth, even if it doesn’t always feel like it. And you need to make sure your spouse can meet the mortgage payments without your income
  • Adding debt – whether it’s a loan for home improvements or a new car, you’ll want to make sure your life insurance is a resource if you get in over your head.
  • Changing jobs – your coverage doesn’t necessarily follow you.
  • Changes within your business – if you have to hire people with special skill sets, that could increase the bottom line of the benefits you offer.
  • Supporting aging parents – you can’t claim them as dependents, but you can incorporate their financial needs into your life insurance plan.
  • Changes to your marital status – if you divorce or become widowed, you need to consider the future for yourself, and any children.
  • Planning for college – some life insurance plans are designed to be cashed out to help your child pay for school.
  • Planning for retirement – after paying into it for decades, will your life insurance give you any kind of income? Or at least ensure that those you leave behind are not incurring your debt?
  • As you can see, there are many life changes which can affect life insurance – don’t wait to examine your policy, and alter it to suit current or future needs.

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