When Should You Change Your Life Insurance Policy?Submitted by Shoemaker Financial on November 30th, 2018
You know why you should get life insurance. To protect your family. To leave an inheritance. To pay off debts and other expenses. To create more financial stability. To have more peace of mind.
But is there ever a time when you should reconsider your insurance coverage or change your policy?
Experts suggest policyholders review their coverage every few years to ensure it coincides with their current needs.
Here are seven situations that may warrant a reexamination of your policy:
Marriage or divorce. Your insurance needs change as your family grows or shrinks. Most households led by married couples rely on two incomes. If one dies, the other is left burdened with debt or other household expenses. Divorce reduces the need for higher policy coverage. You may also want to change beneficiaries following a divorce; if you later decide to remarry, you’ll have to update your beneficiary designation.
Buying a home. If you get a mortgage, your policy should have adequate coverage to pay off the house if you or your spouse dies. You should also examine your policy coverage if you’re buying a second home. As a general rule, conduct policy reviews whenever you make changes in your housing or living arrangements.
Children or dependents. This should prompt reviewing your policy on both sides. Children, especially younger ones, require careful financial planning to ensure their future needs are met. Older or adult children leaving home for the first time may allow you to rearrange your budget priorities or pursue other types of insurance coverage to ensure your child gets through college.
Changing employment. A change at your workplace—or a change of workplaces—may warrant a reexamination of your insurance coverage. You may have received a promotion or switched employers. Consider your options. Did your previous employer offer an insurance plan? How about your new job? With a change in income, you may need to make adjustments to your policy.
Getting a loan. You may want to look at your policy coverage if a loan is large enough to cause hardship on your family if you or your spouse dies. The average car payment, for example, is $479 a month; the average car loan is $30,032 for an average length of 68 months. If you have two cars and one of you dies, the survivor is saddled with those monthly car payments—and two cars.
Changing beneficiaries. Beneficiaries are often assigned when policies are established. Sometimes changes need to be made if beneficiaries die or relationships change. Some people assign policy beneficiaries to people who cosign loans. Once the loans are discharged, you may want to reassign the beneficiary.
Changes in health. If you get in shape, lose weight, or are able to kick a bad habit, you may qualify for a reduction in insurance premiums.
If you would like to discuss your current financial needs or review your current policy, we’re happy to talk.
Securities and Investment Advisory Services offered through Securian Financial Services. Member FINRA/SIPC. Shoemaker Financial is independently owned and operated. Shoemaker Financial 2176 West Street, Suite 100, Germantown, TN 38138. Neither Securian Financial Services, Inc. nor Shoemaker Financial are affiliated with Platinum Advisor Marketing Strategies, LLC. No. 2301076 DOFU 11.1.18
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Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.
Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods.