The Best Time to Update Your Life Insurance Coverage?

Should you ever review your life insurance policy? Before making any changes, policyholders should consider a number of factors.

Your life insurance coverage amount may need to change as your family grows and changes. For example, you may not require as much coverage as you did when your children were younger. You don’t have as many dependents, so you can get by with less insurance.

Policyholders should also compare their current debt to the amount they carried when they first purchased the policy. If the ratio remains the same, it may benefit them to stick with their current policy, according to the Osceola Sentinel-Tribune.

Individuals should also consider their current retirement savings. Couples who have not adequately planned for retirement should maintain their life insurance coverage in the event that their spouse passes away.

According to the Insurance Information Institute, if a spouse dies young, he or she may not have received salary increases that would have increased employer pension benefits and/or IRA contributions. A life insurance policy can help to mitigate the impact of reduced retirement savings.

According to the Insurance Information Institute, you may also be able to leave money to your heirs or favorite charities after your death.

Life changes, such as children leaving home, can raise a number of concerns about retirement and life insurance planning. Policyholders should consider other financial options, such as trust funds, future college tuition for children, unexpected medical bills, and debts that life insurance may help to cover.

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