When was the last time you reviewed your life insurance? For many people, the answer is sometime around when they purchased the policy.
Life insurance is often put in place during a major life event: getting married, having children, buying a home or starting a business. Once the paperwork is complete, it's easy to check it off the list and move on. But as we all know, life rarely stays the same.
Your income changes. Children grow up. Mortgages get paid down. Businesses grow or are sold. Retirement gets closer. And the reasons you originally purchased life insurance may change right along with everything else.
When Should You Take Another Look?
There isn't a single timetable that's right for everyone, but certain life events should prompt a review of your coverage. Consider taking another look if you've recently:
- Married or divorced
- Welcomed a child or grandchild
- Purchased or paid off a home
- Experienced a significant change in income
- Started, grown or sold a business
- Had children become financially independent
- Made significant changes to your estate plan
- Begun preparing for or entered retirement
Even without a major life event, a policy that hasn't been reviewed in several years may deserve another look.
A Review Doesn't Necessarily Mean More Insurance
This is an important distinction. Reviewing your life insurance isn't about automatically purchasing additional coverage. The goal is to understand what you currently have, why you have it and whether it still makes sense.
You may determine that your existing coverage remains exactly what you need.
You may find that your needs have increased or changed. Or you may discover that a policy purchased years ago is no longer serving the purpose it once did.
It's also worth reviewing beneficiary designations and making sure they continue to reflect your wishes, particularly after significant family or estate-planning changes.
Your Insurance Should Evolve With Your Plan
At FourFront Wealth Management, we believe financial planning is an ongoing process rather than a one-time event. As your life changes, different pieces of your financial plan need to change with it. Insurance is no exception.
This Life Insurance Awareness Month, consider pulling out those policies you haven't looked at in a while. Understanding what you own and how it fits into your financial picture is a simple but important part of keeping your plan aligned with the life you're living today.