How to Review Your Life Insurance Policy Every Year

 

Life insurance is one of the most important financial products you can buy to protect your loved ones. It can provide them with essential income, cover your funeral and burial expenses, pay off your debts, and even leave a legacy. But buying life insurance is not a one-time decision. You need to review your policy regularly to make sure it still meets your needs and goals.

Why? Because life changes. And so do your life insurance needs. You may have more or less dependents, more or less income, more or less assets, more or less health issues, etc. These changes can affect how much coverage you need, how much you pay, and who gets the benefits.

By reviewing your life insurance policy every year, you can identify any gaps in your coverage, evaluate the performance of your policy, and find new opportunities to improve your protection and peace of mind. In this article, we will show you how to review your life insurance policy every year, what to include in your review, when to review your policy, and how to compare and update your policy.

What to Include in Your Review

The first step in reviewing your life insurance policy is to gather all the relevant information about your policy. This includes:

• The type of policy: Is it term life, whole life, universal life, or variable life? Each type has different features, benefits, and costs.
• The carrier: Which company provides the insurance? Do they have a good reputation and financial stability? How is their customer service?
• The policy number: This is a unique identifier for your policy. You will need it to access your online account or contact your agent.
• The coverage amount: How much money will your beneficiaries receive if you die? Is it enough to cover their needs and goals?
• The premium: How much do you pay for your policy? Is it fixed or variable? When is it due?
• The term: How long does your policy last? When does it expire? Can you renew it or convert it to another type of policy?
• The riders: Do you have any additional features or benefits attached to your policy, such as accidental death benefit, waiver of premium, disability income, etc.? What are the terms and conditions of these riders?
• The beneficiaries: Who will receive the money from your policy if you die? How are they named and classified? Can you change them?

You can find most of this information from your policy document, which is a legal contract between you and the carrier. You should have received a hard copy of it when you bought the policy. You can also access it online through your carrier’s website or app. If you have any questions or doubts about your policy information, you can always contact your agent or advisor for clarification.

It is important to review all these elements of your policy because they can change over time and affect your policy. For example:

• Your coverage amount may be too high or too low based on your current income, expenses, debts, assets, etc.
• Your premium may increase or decrease based on your age, health status, market conditions, etc.
• Your term may end soon and leave you without coverage or force you to buy a new policy at a higher price.
• Your riders may expire or become obsolete based on your current situation or needs.
• Your beneficiaries may change due to marriage, divorce, birth, death, etc.

By reviewing these elements every year, you can make sure that your policy is up to date and reflects your current needs and goals.

When to Review Your Life Insurance Policy

The next step in reviewing your life insurance policy is to decide when to do it. There is no hard and fast rule for this, but a general recommendation is to review your policy at least every year or every three to five years.

Why every year? Because a lot can happen in a year. You may have a significant change in your personal or professional life that affects your life insurance needs. For example:

• You may get married or divorced
• You may have a child or adopt one
• You may buy a house or pay off your mortgage
• You may start a business or sell one
• You may retire or change jobs
• You may inherit money or incur debt
• You may develop a health condition or improve one

Any of these events can alter how much coverage you need, how much you pay, and who gets the benefits. By reviewing your policy every year, you can catch these changes early and adjust your policy accordingly.

Why every three to five years? Because even if you don’t have any major life changes, your life insurance needs may still evolve over time. For example:

• Your income may increase or decrease
• Your expenses may rise or fall
• Your assets may grow or shrink
• Your goals may change or expand
• Your beneficiaries may have different needs or expectations

Any of these factors can affect how well your policy matches your current situation and future plans. By reviewing your policy every three to five years, you can reassess your needs and goals and fine-tune your policy accordingly.

How to schedule and conduct a review? There are a few ways to do this. One is to set a reminder on your calendar, phone, or app. Another is to align your review with a recurring event, such as your birthday, anniversary, tax season, etc. A third is to contact your agent or advisor and ask them to schedule a review for you.

Once you have a date for your review, you should gather all the documents and information you need for your review, such as your policy document, online account, financial statements, etc. You should also prepare a list of questions or concerns you have about your policy, such as:

• Do I have enough coverage?
• Am I paying a fair price?
• Am I taking advantage of all the features and riders?
• Are my beneficiaries up to date?
• Are there any new products or options available?

You can then conduct the review by yourself or with the help of an agent or advisor. If you do it by yourself, you should compare your current policy with your current needs and goals and look for any gaps or opportunities. If you do it with an agent or advisor, you should discuss your questions and concerns with them and ask for their recommendations and analysis.

How to Compare and Update Your Life Insurance Policy

The final step in reviewing your life insurance policy is to compare and update your policy if needed. This means making any changes or adjustments to your policy to make sure it still meets your needs and goals.

How to compare your policy? There are a few ways to do this. One is to use online tools or calculators that can help you estimate how much coverage you need, how much you pay, and how much you save. Another is to get quotes from different carriers or policies that offer similar or better features, benefits, and costs. A third is to consult an agent or advisor who can provide you with a comprehensive comparison and evaluation of your policy.

How to update your policy? There are a few ways to do this. One is to make minor changes to your existing policy, such as adding or removing riders, changing beneficiaries, increasing or decreasing coverage, etc. These changes may require some paperwork, fees, or underwriting. Another is to switch to a new carrier or policy that offers better features, benefits, and costs. This may require canceling your old policy, applying for a new one, paying surrender charges, etc. A third is to keep your existing policy and buy an additional one that complements or supplements it. This may require paying extra premiums, undergoing medical exams, etc.

Before you update your policy, you should weigh the pros and cons of each option and consider the impact on your coverage, premium, term, riders, beneficiaries, etc. You should also consult an agent or advisor who can guide you through the process and help you avoid any pitfalls or mistakes.

Conclusion

Reviewing your life insurance policy every year is a smart way to ensure that your policy still meets your needs and goals. By doing so, you can identify any gaps in your coverage, evaluate the performance of your policy, and find new opportunities to improve your protection and peace of mind.

If you haven’t reviewed your life insurance policy in a while, now is a good time to do it. You can start by gathering all the information about your policy, deciding when to review it, comparing it with your current situation and goals, and updating it if needed.

If you need help with reviewing your life insurance policy, you can contact us today. We are experts in life insurance and we can help you find the best policy for you and your loved ones. We can provide you with a free quote, a free comparison, and a free consultation. Don’t wait until it’s too late. Review your life insurance policy today and secure your future tomorrow.

Thank you for reading this article. We hope you found it useful and informative.