As we turn the calendar to a new year, a lot of people make major lifestyle changes to ensure they are living their best lives. We never know when our time on Earth will expire. As someone once said, “Life is what happens when you’re busy making other plans.”
Being prepared for those unexpected life moments can help soften the financial burdens, and insurance is a significant part of being prepared. The beginning of the year is a great time to review all of your insurance policies, including life insurance.
Here are some tips on what to look for when reviewing your life insurance policies for the new year or any time of year you decide to review them.
First, it is important to be aware of your stage in life. If you’re young, you will be able to get a better premium on any life insurance polices that you chose. The sooner you are able to lock in those rates, the better, as long as it’s a policy that will grow as you need it to.
If you’re at a midpoint in life, you may be saving more aggressively for retirement. It would be wise to review the payout amount for your life insurance policies to ensure that your loved ones will be taken care of in the event of your death. You may even want to consider adding riders to your policy, such as the waiver of premium in the event of disability.
After reviewing your stage in life, the next steps is reviewing the beneficiaries. The person who will receive the payout from your life insurance policy should be someone who is dependent on your income for their daily needs. That person should also be the one who oversees funeral expenses.
It is beneficial to leave a notarized will so that people will know exactly who gets what in addition to your life insurance beneficiaries. Think about any additions you have added to the family, such as newborn babies. If you have any children who have recently turned 18, you may consider getting them their own life insurance policies. These may be difficult decisions to make, but they are definitely necessary.
Finally, it is important to review the value on your policies. If you bought the policy when you were making less money and you have since received a promotion, your insurance policy payout should reflect that.
For cash value polices, you want to ensure that they are performing well. You can request an in-force illustration to project how the policy will perform from now until the end of your life. If the policy has been performing well and is expected to continue at that rate, you may be able to forego premium payments. If the policy is not performing well, you may have to pay higher premiums to keep it in force.
In conclusion, you should always be reviewing your life insurance policies as your life changes. We are happy to answer any questions you may have about your life insurance needs.