5 Reasons to Reevaluate Your Life Insurance Contract

Most of us think of “life insurance” as something you purchase once, and then you’re covered for life and you can forget about it. But that’s actually not true at all. While it’s not something that you’re going to reconsider every week or even every month, there are definitely times to evaluate your life insurance needs once again. And in the event that you do need more coverage or a different type of policy, making a switch is easier than you might think.

Your household has changed. A single person, with low debt and no dependents, might only need a basic policy to cover final expenses. On the other hand, a married couple with six children, a mortgage, and credit card debt obviously need a very different type of policy! As you get married or have children, it is time to reevaluate your life insurance coverage.

Your spouse, or a child, has become disabled. What if your child is diagnosed with a lifelong disability? For that matter, what about your spouse? Your insurance outlook might change significantly, when you realize how much income that person needs in the event of your absence.

You purchase a house. If you passed away prematurely, would your spouse and/or kids be able to stay in the family home? A life insurance policy can provide a payout that covers the mortgage, so your loved ones aren’t forced to move at an already difficult time.

You purchased your policy before 2009. After 2009, most insurance companies upgraded the “life expectancy” part of their premium formulas. Life expectancy has risen, or in other words, you’re expected to live longer than you were just a decade ago. That means you could score a slightly lower premium if you renegotiate.

You need a different type of policy. At some point, it might occur to you that you need a different type of life insurance policy. Perhaps your term life insurance contract is expiring, and you need to opt into a permanent one. Maybe you’ve realized that a policy which builds cash value can help you prepare for unexpected expenses. Or, you might be worried about the need for income in the event of a terminal illness, in which case a policy with a living benefits rider might be appropriate.

Whatever your reasoning, there are times that your old life insurance policy just doesn’t suit you anymore. Remember to meet with us to perform a new needs analysis every few years, or any time your life changes. We can help you assess your current policy, and compare options for a new one if it’s time to upgrade.