Life insurance is one of those things we tend to ignore most of the time. We may think about it once, buy a policy, and never consider whether it’s time to update our coverage. But as your life changes, your life insurance needs may also change. That’s why it’s important to review your policy annually, to ensure that you have the best coverage for you and your family.
Term Life or Whole Life?
The first factor to think about is whether term life or whole life is more appropriate. Term life insurance policies last only a certain number of years. They generally provide only death benefits. Whole life insurance policies, on the other hand, accumulate value over time and confer the same death benefits. These policies are more expensive than term life insurance policies, but they can be better in the long run.
Do Life Changes Mean Policy Changes?
If you’ve changed jobs, had a child, or even if your retirement prospects have changed, it’s time to look at your life insurance policy. A growing family or changing economic environment mean that you may need more from your life insurance.
Meanwhile, it’s also important to remember that your life insurance premiums are based on a variety of factors, such as health and age. If something changes—you give up smoking, for instance—you could be eligible for a lower premium.
Ultimately a life insurance policy is no different from any other insurance policy; just as you’d review your auto insurance or homeowner’s policy on a regular basis, sit down with your insurance advisor on a regular basis to review life insurance policies and options.