Life Changes, So Should Your Coverage: The Importance Of Life Insurance Reviews

Life insurance is one of the most important financial tools you can have. It provides peace of mind knowing that, in the event of your passing, your loved ones will be financially protected. However, just like other aspects of your financial life, your life insurance coverage isn’t something that should remain static. As your life evolves, so should your policy. That’s why regular life insurance reviews are essential to ensure that your coverage continues to meet your needs and reflect your changing circumstances.
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In this blog, we’ll explore why it’s important to review your life insurance policy regularly, when you should consider making changes, and how to make sure you have the right coverage at every stage of life.

Life Changes and Your Life Insurance Needs
Your life is constantly evolving, and so are your needs when it comes to life insurance. From marriage and children to career changes and retirement, major life events can all impact the level of coverage that is right for you. Failing to update your life insurance policy after a significant life change can leave your loved ones unprotected or result in paying for unnecessary coverage.

Here are some key life changes that may require a life insurance review:

• Marriage
  When you get married, your financial responsibilities and priorities change. If you didn’t already have life insurance, getting coverage after marriage is a smart decision. If you already have a policy, you may need to increase your coverage to account for your new spouse’s financial needs, such as shared debts or household expenses.
  
  
• Children
  Having children is one of the most common reasons people review and adjust their life insurance. You’ll want to make sure that your policy provides enough coverage to support your family if something were to happen to you. This includes covering daily living expenses, education costs, and any outstanding debt you might have.
  
  
• Homeownership
  Buying a home is another important milestone that may affect your insurance needs. A mortgage is likely the largest debt you’ll have, and it’s crucial that your life insurance policy is sufficient to pay off the mortgage if you pass away. This ensures that your family can remain in the home without worrying about making mortgage payments.
  
  
• Career Changes
  A career change can lead to shifts in income, financial responsibilities, or benefits. If you’re switching jobs, taking on a higher-paying position, or moving into a self-employed role, you may need to adjust your life insurance coverage to reflect these changes. Additionally, some employer-provided life insurance policies may not be as comprehensive as personal policies, so you may want to supplement them with additional coverage.
  
  
• Divorce
  If you’ve gone through a divorce, your life insurance needs may change. You may need to revise your beneficiary designations or adjust your coverage levels, especially if you were providing financial support to your ex-spouse or children.
  
  
• Retirement
  As you approach retirement, you may have fewer financial obligations, and your children may have become financially independent. This could mean that your life insurance needs have decreased. On the other hand, some retirees choose to keep their coverage for estate planning purposes or to ensure their spouse’s financial security in retirement. It’s important to evaluate how your coverage aligns with your post-retirement goals.

How Often Should You Review Your Life Insurance Policy?
A general rule of thumb is to review your life insurance policy every one to two years. This gives you enough time to assess any changes in your life circumstances and adjust your coverage as needed. However, some key life events may prompt an immediate review, and you should never wait too long to make changes.

Some situations that may warrant an immediate review of your policy include:

• Getting married or divorced
• Having or adopting children
• Changing jobs or retiring
• Purchasing a new home or taking on significant debt
• A significant increase or decrease in income
• Health changes or a medical diagnosis

What Should You Look for During a Life Insurance Review?
When reviewing your life insurance policy, there are several key factors you should examine to ensure that your coverage continues to meet your needs:

• Coverage Amount
  The amount of life insurance you need depends on your financial obligations and goals. As your life evolves, your coverage amount may need to be increased or decreased. For example, if you’ve paid off your mortgage or your children are financially independent, you may no longer need as much coverage. On the other hand, if you’ve had additional children or taken on more debt, you may need to increase your coverage to ensure your loved ones are adequately supported.
  
  
• Beneficiaries
  Review your beneficiary designations regularly, especially after major life changes. If you’ve had a marriage, divorce, or family situation that has shifted, you might need to update who will receive the benefits of your life insurance policy. Make sure that the right people are named as beneficiaries and that your wishes are clearly outlined.
  
  
• Policy Type
  There are different types of life insurance policies, including term life, whole life, universal life, and variable life insurance. Each type serves different needs. If your financial situation or goals have changed, you might want to consider switching between these types. For instance, if you initially bought term life insurance for temporary coverage and now want permanent coverage, you may need to explore options like whole life or universal life insurance.
  
  
• Riders and Add-Ons
  Many life insurance policies come with riders or add-ons that provide additional benefits, such as coverage for critical illness or long-term care. As your needs change, you may want to add or remove certain riders from your policy. Make sure that the riders you have are still relevant to your life circumstances.
  
  
• Premiums and Affordability
  Your premiums may increase as you get older or if your health changes. It’s important to review your premiums to make sure you can still comfortably afford them. If your financial situation has improved or if you’re looking for more coverage, you might consider upgrading your policy. Alternatively, if you find the premiums are no longer sustainable, you might need to reduce your coverage or switch to a different type of policy.

Working with a Financial Advisor
While reviewing your life insurance policy is essential, it’s also helpful to work with a financial advisor or insurance agent who can guide you through the process. They can help you assess your current needs, make recommendations for policy changes, and ensure that your policy aligns with your overall financial plan. They can also help you understand any tax implications of changing your coverage and assist with finding the best rates for the coverage you need.

Why Business Insurance Is Important
While reviewing your personal life insurance policy is crucial, it’s also important to consider the broader picture of insurance protection for your business. If you're a business owner, business insurance helps protect your company, employees, and personal assets. Whether it’s general liability, property insurance, or workers’ compensation, having the right coverage helps you manage risk, stay compliant, and ensure the continuity of your business in the face of unforeseen events.
Having the right business insurance is just as vital as reviewing your life insurance to make sure you're protected from financial losses due to accidents, lawsuits, or property damage.

Conclusion
Your life is constantly evolving, and as it does, so should your life insurance coverage. Regularly reviewing your policy ensures that it continues to meet your needs and provides the necessary protection for your loved ones. Whether it's increasing your coverage after having children, reducing your policy as you approach retirement, or updating beneficiaries after a major life change, staying on top of your life insurance needs is a key part of financial planning.

In addition, don’t forget to consider business insurance to protect your business assets, especially if you are an entrepreneur or business owner. Both life and business insurance provide peace of mind, ensuring that you and your loved ones are financially secure in case the unexpected happens. 

At UG Insurance Brokerage Inc., we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (718) 848-7777 or CLICK HERE ​to request a free quote.

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.