Getting a life insurance policy can be such a big decision that once it’s done, you almost want to wipe the sweat off your forehead and move on with your life, knowing it’s taken care of. And while you do have that peace of mind now, it is not something that you want to “set and forget”.
There are tons of changes that can occur during your lifetime, and you want your life insurance policy to reflect those changes. It’s crucial to review and update your policy so that your loved ones are always protected. Continue reading to learn when and why you should revisit your life insurance.
Why Updating Your Policy Matters
From its inception, life insurance has been designed to provide financial security in the worst times of people’s lives. However, with certain life milestones come new responsibilities and financial obligations. If you avoid updating your policy, you leave yourself and your loved ones vulnerable to financial hardship. Ensure that your life insurance coverage reflects your current goals.
Life Events That May Require an Update
You can go through significant changes in your life, but there are a few that will require you to do a check-in with your life insurance policy.
Marriage or Divorce. When you get married, you create a household with another person where you share half or, maybe, all of the financial responsibility. If that’s the case, you want to ensure that if you pass away, your contribution is covered. Additionally, because you are sharing a life with someone, you want to make sure that they are the ones receiving the death benefit. Add your spouse as a beneficiary to your policy. On the other hand, if you are getting divorced, consider removing them as a beneficiary, or it could get messy.
Having Children. Along with the joy of children, you also get increased financial responsibilities. You must consider their education, both short-term and long-term, the cost of their childcare, and any medical support they’ll need, temporary or permanent. This means reevaluating the coverage amount of your policy. What was enough for your partner might not be nearly enough for your partner and 3 growing children. Additionally, you’ll want to add them as contingent beneficiaries to ensure that they are protected.
Buying a Home. With all of the paperwork that you look through when buying a home, your life insurance policy should be added to the list. A mortgage is a long-term debt, and it doesn’t just disappear when you pass away. In fact, it’ll fall on your partner or your children. So, to prevent this additional stress, you’ll want to update your coverage to cover the mortgage and ensure that your family can keep the home when you are no longer here.
How to Review and Update Your Policy
Making these updates doesn’t have to be another big thing added to your plate. Working with a licensed insurance agent can make the process very simple. They can meet with you once a year, or however frequently you desire, and assess the changes in your life to determine the upgrades or downgrades your policy needs. Move forward with peace of mind knowing that your insurance plan matches your life’s journey.
Life Insurance Questions?
We hope that this information on updating your life insurance policy is useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
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