Changing one’s life insurance coverage may not be the first thing that comes to mind when an important life change occurs. However, keeping an up-to-date insurance policy can spare you and your family a headache in the future.
The Insurance Information Institute, a group that provides information on insurance-related topics, lists important times to review one’s coverage.
Getting married means sharing responsibilities with your significant other. By updating your life insurance, you can ensure that the surviving spouse will have the resources to make ends meet.
Getting divorced means splitting assets and adjusting one’s life insurance policy. Failure to do so could result in the wrong beneficiary to receive the policy.
Having a new baby
Having a baby, by birth or adoption, means adding more life insurance to ensure the security and financial stability of one’s family. It is essential to factor in educational costs, such as college.
Switching jobs or experiencing significant income changes
Depending on your new income status, you may want to either replace coverage lost from a previous policy, add additional coverage if salary increases or cut back if salary decreases.
In all such instances, it’s important to make sure all of your coverage information is up to date, particularly as it relates to beneficiaries who are set to inherit money from one’s policy.
The approach of retirement may also be a time to consider one’s life insurance needs, especially if a policy figures into one’s long-term investment planning.