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 necessary? Yes, it is is crucial to keep checking your insurance plan and see if it is still beneficial. So, let’s understand how often you should return 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. 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 secure if something happens to you. But if the plan is outdated, it beats the purpose, and your family loses the financial backup you built for them.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 review 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.
Home Loan
Getting a home loan can put considerable pressure on your family to pay off the loan if something happens to you. This is when you must return to your life insurance policy to include your plan’s loan expenses.
Children
Having children raises numerous responsibilities, which will demand several changes in your policy. You will have to take care of them from their primary education to their college expenses. Hence, it would help if you account for your children’s education expenses and the period they will depend on your spouse. You can solve this by increasing your sum and adding riders to maximize coverage.
Health Issues
Illnesses and ailments mostly come unannounced, leading to medical bills and stress. Certain disorders can also put you out of work, putting the pressure of paying off indirect expenses like loans, rent, etc., on your family. To avoid this financial strain, you can get health riders as you age to secure your loved ones.
Career
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 ensure they are not affected by this change.
