Life insurance is protection and assurance for the most difficult time of anyone’s life – the loss of a loved one. It is the insurance policy you hope never has to be used but can be the most valuable thing you leave your family. The agents at Hometown Life Insurance can help you find the right policy with the right coverage for your family’s needs. If you already have a life insurance policy, you may need to revisit your policy to ensure you have the right coverage. The three primary needs of your survivors will be: replacement of your income if you pass away, debts, and final expenses. In consideration of these needs, here are ten reasons you may need to revisit your policy:
1. You Purchased a Home
It is an exciting time in anyone’s life, but it may also be a good time to look at your life insurance. Purchasing a home creates both a debt and an asset. While your mortgage is in its early years, your home is likely one of your largest debts. If something were to happen to you, your policy should have sufficient coverage to address both the house’s debt and your family’s income needs to continue living in the home. As your mortgage costs decrease, the amount of necessary coverage may vary.
2. Your Marital Status Changed
A change in marital status affects many aspects of one’s life. You either gain or lose a beneficiary. Either way, your policy should be updated to ensure those presently responsible for your final expenses are named as your beneficiaries. A change in marital status can be a busy time, and the legal paperwork associated with the change may take a back seat to other priorities. However, not updating your policy to properly reflect your current status may cause issues for your loved ones.
3. Your Family Status Changed
Welcoming a new addition to the family is another example of beneficiary information. Your policy should reflect all beneficiaries. If you have added dependents, you will also want to look at the amount of coverage you will need for your survivors’ income needs. The coverage limits of your policy should consider the costs to raise children, including the substantial costs of college tuition.
4. New Job or Promotion
A change in income may mean a change in lifestyle. Your family may increase their quality of life with a better income, and your policy should be adjusted to consider these changes. A new job or promotion may be a good time to consider increasing your coverage to allow for adjustments to your family’s income needs.
5. You Have Fewer Dependents
When your children are grown and no longer depend on you, or you have other dependents who no longer require your financial support, you have an opportunity to consider reducing your coverage limits. Changes in dependents are opportunities to revisit your policy, as this may be an instance where you are over-insured, and you have an opportunity to lower your coverage and premiums.
6. Your Health Status Changed
If you consider that any insurance policy calculates an assessment of risk, you can correlate how your health may impact your life insurance premium. A change in health, such as quitting
smoking, can positively impact your rates. In contrast, the diagnosis of an illness that increases your risk of death is also a reason to revisit your policy.
7. You Have Increased or Decreased Significant Debts
Your policy should have an appropriate amount of coverage to cover your debts and limit any financial burden on your survivors. If, for instance, you pay off your mortgage or otherwise resolve a significant debt, you could look into lowering your coverage. If, however, you increase your debts either through an acquisition or property or taking out significant loans, you should verify that your coverage is sufficient to resolve these debts.
8. Retirement
Retiring is another major life change and opportunity to revisit your coverage. By the time you retire, you may have sufficient savings to cover the income expectations of your survivors. And you have hopefully resolved most of your major debts. In this situation, your coverage needs may be limited to your final expenses.
9. Your Rates Are Not Competitive
If you are paying more for life insurance than your peers in similar financial situations, your insurance rates may simply not be competitive. While you do not want to trade a quality plan for insufficient coverage, there is no harm in shopping for coverage if you feel your rates are too high. Our Hometown Life team can help you find the policy that suits your needs.
10. Any Major Life Change
Any time your financial situation changes significantly due to a major life change, revisit your life insurance. Consider this equation: Coverage = final cost + debts + income needs.
Final Thoughts
Final needs or expenses are difficult ideas to consider. The right policy can help you keep these thoughts in the very back of your mind, where they belong. Assurance that you have the right coverage to take care of your family, loved ones, and survivors is the best reason to carry the right life insurance policy.
Our team at Hometown Life Insurance is here to support you as you identify and plan for your insurance needs. Clients that work with us benefit from our team of experts with a consistent process to help each client with their individual needs. Searching and applying for life insurance can be complicated, confusing and time-consuming on your own, but with the help of our experienced, licensed team members, it doesn’t have to be. Contact us today to secure your family’s financial future.
