Purchasing a life insurance policy for your family is an act of love. However, the purchase of your policy should be just the first step you’ll take to carefully plan for your heirs. As much as you review your health, auto, or homeownership policies as time marches on, you’ll also want to regularly review your life insurance policy. Here’s how to use a life insurance review to maximize your benefits.
There are few certainties in life, but change is one of them. Our lives are constantly changing, which is why you need to make sure your life stays up to date. From new babies to new businesses to fluctuations in debt and higher education costs for children, change is constant as you age. Here are five life changes that should trigger a life insurance policy review with your trusted financial advisor.
1. Change in Family Members
When you welcome a new child, grandchild, or son- or daughter-in-law, you may want to include them as beneficiaries in your life insurance policy. Likewise, in the event of a divorce or marriage, you may also wish to adjust your policy.
2. Change in Employment
Taking a new job or launching a new business is also an indicator that it’s time to review your policy. You may wish to increase your death benefits due to a pay raise. Alternatively, if you’ve invested money in a new venture that you had previously planned to pass on to an heir, you may also want to increase death benefits to make up for the reallocation of money.
3. Change in Residence
If you have recently bought a new home with a new mortgage, schedule a policy review. This can help confirm your loved ones will be able to remain in the home in the event of your passing.
4. Change in Children’s Financial Status
If your children are financially stable adults, you may want to review your beneficiaries because your spouse may benefit more from being the sole beneficiary. Alternatively, if your children are just leaving home to attend college, you should review the policy to confirm the benefits will allow them to continue their studies.
5. Change in Debt
If you’ve recently taken on debt for credit cards, home renovations, caring for an aging parent, or medical bills, it’s time to schedule a life insurance review. You’ll need to review the policy to make sure that the benefits are sufficient to cover outstanding debts without negatively impacting your heirs.
Consider that you and your spouse, both now in your 60s, purchased a life insurance policy with a sizable death benefit for your children. You’re continuing to make large monthly premium payments, even though your children are now self-sufficient.
During your policy review, you’re reminded that a policy loan was triggered when you made a delinquent payment years ago. Since then, your policy performance has been impaired. Your trusted financial advisor shows you less expensive policy options so that you can repay the existing policy loan, eliminate the interest, and still maintain similar death benefits. In this case, the life insurance policy review saves you significant money.
If you haven’t reviewed your life insurance policy recently, it’s smart to schedule an appointment as soon as possible. Meeting with a trusted advisor to review your policy will help ensure the policy provides for your loved ones. It will also help you verify that any discounts you should be receiving are current. To schedule an appointment with Finley Davis to discuss strategies for your estate planning and death benefits, contact us today.