Life insurance is a necessity for anyone who is buying a home, welcoming a child or has dependents, whether that’s children, a partner or a business. As your life changes, your insurance needs to as well.
Here’s what you need to think about to make sure you, your loved ones and your business are taken care of.
When to check
Whatever cover you have, you need to strike the right balance between insuring what’s important and paying more than you need. Your circumstances will unlikely stay the same throughout your life, so a regular check is key.
A lot can change in a year – babies born, marriages entered and left, job promotions, income changes. To make sure none of those changes slips through your insurance cracks, at least once a year you should make sure your policy still serves your current situation. You should also review your insurance whenever you’ve experienced big changes in your life.
Your family has changed
When you choose your life insurance plan, you will have certain beneficiaries on your policy. These are the people who are entitled to your pay-out if something happened to you. If anything changes – you have a baby, get married or divorced, for example – your insurance needs to be updated to reflect your new circumstances. You’ll also need to update your policy if you have older relatives who move in and become financially dependent on you – your insurance needs to cover their costs if something were to happen to you.
Something’s happened at work
If you get promoted at work, shift careers or stop working, your financial situation will change – and your insurance policy needs to be updated to match.
You’ve started, sold or closed a business
If you own a business, you need to think carefully about how its finances could affect your loved ones when you’re gone. Your insurance policy needs to be updated if you start a business, sell a business or any major changes happen within your company.
You’ve changed your assets
Have you bought a new home, downsized or added property to your portfolio? Whatever assets you have will greatly affect the life insurance cover you need. If you’ve downsized, but haven’t updated your policy, you’ll be paying for cover you don’t need. But if you’ve upsized and don’t update your policy, you won’t be covered for the full value of your assets.
You’ve taken on or paid down debt
From the time you take out your first home loan to when you’re 65 and retired, the status of your mortgage will change drastically. It doesn’t make sense to keep your insurance the same through that time. Review your insurance every time there’s a change to your debt situation – whether that’s restructuring your loan, adding another debt or becoming mortgage-free.
Something’s happened with your health
Your health hugely impacts your life insurance. If you get a life-changing diagnosis, you may want to increase your cover so you’re protected. You’ll also want to review things if you make changes to your lifestyle, like giving up smoking. Most insurers will drop the cost of your premium if you’ve kicked the habit for more than a year.
Stay on top of insurance and protect what’s important
Life insurance will only do what you need if it suits your circumstances. You need to review your policy regularly to ensure it still fits. As life changes, your insurance needs to as well – so your most valued people and things stay protected.
On the hunt for a life insurance policy, but don’t know where to start? Talk to a Global Finance expert today – we’ll help you to get on track.
**Underwriting criteria and insurer terms T’s and C’s apply