People choose to get an insurance policy when they start earning or have settled career-wise and can afford higher premium policies. But even if you bought a term plan a year ago, how often should you review it, and is it even necessary? Yes, it crucial to keep checking your insurance plan and see if it is still beneficial for you. So, let’s try to understand how often you should go back to the life insurance you bought.
Why Should You Review the Term Plan?
After you get a term insurance policy, major and minor changes are bound to occur in your life. Some important alterations like marriage, children, death of your nominee, getting diagnosed with an ailment, etc., will require you to modify your life insurance. The purpose of a policy is to ensure that your loved ones are secured if something happened to you. But if the plan is outdated, then it beats the purpose, and your family loses the financial backup you built for them. Here are some instances in life when you should review your policy:
New Marriage or Divorce
If you recently got married, there will be various expenses that you will have to bear now that you have a spouse. In such situations, it is advised to go through your policy and see if you require any rider benefits or need a larger sum assured. Many people also end up changing their term insurance beneficiaries after marriage.
Divorce is another instance that will lead to changes in your life. You may need to change your beneficiary or nominee from your ex-wife to someone else in the family.
Getting a home loan can put considerable pressure on your family to pay off the loan if something happened to you. This is when you need to go back to your life insurance policy to include your plan’s loan expenses.
Having children raises numerous responsibilities, which will demand several changes in your policy. From their primary education to their college expenses, you will have to take care of them. Hence, it would help if you account for your children’s education expenses and the period for which they will be dependent on your spouse. You can solve this by increasing your sum assured and also add riders to maximize your coverage.
Illnesses and ailments mostly come unannounced, leading to a pile of medical bills and stress. Certain disorders can also put you out of work, placing the pressure of paying off certain indirect expenses like loans, rent, etc., on your family. To avoid this kind of financial strain, you can choose to get health riders as you grow older to secure your loved ones.
Though you have a stable job now, you may want to switch your career and try your luck in a different industry. This switch can cause you to start a new job at lower pay than your current salary. To safeguard your family from such uncertainties, you can modify your policy to make sure they are not affected by this change.