Tips For Reviewing A Life Insurance Policy
While you've taken some great steps toward securing your family financially by getting a life insurance policy, it is not something you should just purchase and forget about. It's worth periodically reviewing the policy to make sure that it is still meeting the needs for financial obligations down the road. Here are two things you should review.
Make Sure You Have Enough Coverage
The life insurance policy that you purchased a while back may have been fine for your what you needed at the time, but things most likely have changed. Did you recently buy a home, have more kids, or are simply used to a lifestyle due to the higher salary you now make? If so, your old policy may not be enough to cover all of those things.
Figuring out the right amount of life insurance coverage can be difficult. Start by determining all of the things you are hoping to pay for with the life insurance policy. This could be tuition for your children's college and paying off the mortgage on the home. Subtract those large amounts from the amount that would be received and see what is left.
Next, determine how long you hope to have the insurance payout last and if the amount will be enough money to pay for household expenses. If not, you have a couple options. You can change your life insurance policy so that it would receive a bigger payout, or look for ways that the money received could be invested and stretched out for a longer period of time. Simply living off the payout may not be enough, and other techniques could be necessary.
Check For Rate Reductions
Your personal lifestyle choices most likely played a big part in how much your initial insurance rate was. Have things changed since then that has resulted in better personal health? If so, check with your insurance agent to see if you can get a reduced life insurance rate. Big changes like quitting smoking, exercising, and losing weight make you less of a risk and could result in a lower premium. Your insurance provider could request a physical to verify the changes, but it will be worth it if you end up paying less money over time.
For additional tips on what you should review about a life insurance policy, speak with your agent. They are familiar with what you should be looking out for when it comes to whole life insurance.