Within the next couple of weeks, many of us will be making our New Year’s resolutions. While most Americans will focus on losing weight, or quitting smoking, this year I challenge you to think about your financial resolutions for the year. In this blog post, I am going to focus on why you should review your life insurance policy in January, tips for what to review, and how to save money when you get a new policy.
What do You Mean by Reviewing Your Life Insurance Policy?
Your life insurance policy has several components. For the purposes of keeping things simple, I’ll focus on Term Life Insurance – which is what most people buy.
When reviewing your term life insurance policy there are several things I suggest you look at:
If you purchased your insurance policy several years ago, it has probably been some time since you looked at it. Do you remember whom your beneficiaries are? Did you name your spouse or partner as primary beneficiary and your kids as secondary beneficiaries? Have you had another child and not added them as a beneficiary on the policy? Have you gotten divorced, separated or remarried? As you think about all of these questions, it might be a good idea to pull out that policy, (hopefully you know where it is) and look to see whom your beneficiaries are. If it needs updating, make sure you do it immediatey. Don’t be the guy who left his life insurance to his ex wife or the person who left their kids fighting because he/she forgot to update their policy. This January make it a goal to review you beneficiary designations.
Another reason to review your policy is that with time our lives change. For example, it could be possible that you don’t need as much life insurance today as you originally bought. Perhaps you bought your life insurance to cover the mortgage, and now your balance is significantly reduced from what it originally was. Or maybe if your income has increased and with that your lifestyle, you might need more life insurance. Other reasons why you may need more insurance is the birth of a new child, or upgrading your home. If you find you need less insurance, it’s possible that you can save money by shopping for a new life insurance policy.
If you have term life insurance, do you know when your policy is set to expire? Reviewing your policy is important for a few reasons. Maybe you want to convert that policy to a permanent policy – reviewing your policy and calling your insurance company will help you determine if that is an option with your policy and what the cost to convert would be or maybe your policy is expiring within 5 years fewer. If that is the case, it might be wise to compare life insurance quotes rather than waiting until you are older and it becomes more expensive.
If you don’t have life insurance it might be because you don’t need it, however, if you know that you do need it and just never took the time to get it, make it a point to apply this January. Most people overestimate the price of life insurance, and it can actually be very affordable. Don’t hesitate and get a policy while you are young and healthy. Even if you aren’t in perfect health, or have a preexisting health condition, there are still options. Protect your family and get the policy you know you need.
About The Author
Liran Hirschkorn is the founder of chooseterm.com, independent life insurance agent, and expert in high risk life insurance. He helps individuals across the country find the right type of life insurance coverage at the best possible rates.
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