If you’re like a lot of people, you purchased your life insurance policy years ago. You did your research and chose the best policy at the time, and you’ve been faithfully paying those premiums ever since. Naturally, you assume that your life insurance needs are covered.
However, because needs can change over time (as well as the policies offered on the insurance market), your plan might not be the best fit for you anymore. Every few years, you should review your policy by asking these questions.
Term or permanent? A term policy offers coverage for a specific period of time, and then expires. By contrast, a permanent life insurance policy allows you to lock in a premium and then keep that coverage for the rest of your life (as long as you make timely payments).
What are the conversion options? If you do hold a term life insurance policy, it will expire at some point in the future. Then you can purchase a new policy or enroll in permanent life insurance. If your current plan offers a conversion option, you can convert a term policy into a permanent plan, and possibly save a bit on premiums. It’s worth investigating this possibility as you eye an upgrade.
Are your beneficiaries correct? If you named a beneficiary years ago, it is possible that person is no longer the best choice. If you’ve since divorced, you might not want your spouse to inherit your life insurance payout. If that person has passed away, or is no longer an appropriate choice for some other reason, it is time to fill out a new beneficiary form. While you’re at it, consider naming at least one backup beneficiary.
Is your life insurance contestable? Many life insurance companies are capable of contesting an insurance payout, particularly if they have any reason to believe your application was inaccurate. If you want to ensure that your heirs are completely protected, this is something to know and anticipate.
How much coverage do you have? This might be the most important question of all. As your lifestyle and family structure changes, your insurance needs change, too. Every two to three years, meet with us to perform a needs analysis, so that we can calculate whether your current policy offers the full protection that you require.