Policy Review: When and Why You Should Reevaluate Your Life Insurance Coverage

Life insurance can offer financial security for your loved ones, helping to ensure they have financial support if something happens to you. However, life is dynamic, and your circumstances change over time. Regularly reviewing your life policy can help ensure it aligns with your needs.

How Does Life Insurance Work?

Life insurance is an agreement between a person and an insurer. The main objective of this insurance is to offer financial security to the insured’s dependents after the policyholder’s passing. There are several types of insurance policies, including term life, whole life, universal life and variable universal life. Each type has advantages, restrictions and conditions that must be evaluated before making a choice.

When Should You Update Your Life Insurance Policy?

The following are examples of circumstances when you may want to reevaluate your life coverage:

• Getting married—When you tie the knot, updating your life policy is smart. Marriage often means your spouse becomes the primary beneficiary, so you may want to ensure your policy reflects this change.
• Buying a house—As a homeowner, you may need additional coverage to help safeguard your mortgage and provide for your family.
• Having children—New dependents mean increased financial obligations. You may need to adjust your coverage to account for their needs.
• Entering retirement—As you approach retirement, evaluate whether your policy adequately supports your lifestyle and any outstanding debts.
• Changing jobs—A new job or career shift may alter your income and benefits. Review your policy to help ensure it aligns with your current situation and financial goals.
• Taking on debt—If you’ve acquired debt (such as a car loan or credit card balances), consider adjusting your coverage to protect against these liabilities.
• Receiving an inheritance—Windfalls can impact your financial picture. Assess whether your policy reflects your newfound wealth.

How Often Should You Review Your Life Insurance Policy?

Consider scheduling an annual insurance review with your agent as a general practice. This helps ensure that your coverage aligns with your needs and financially protects your loved ones. Regular reviews allow you to adjust your policy based on milestones and financial changes.

Life Insurance in San Pablo, CA

Contact Leadwest Insurance Solutions in San Pablo, CA, to learn more about your options and get a quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.