10 Reasons to Review Your Life Insurance Policies Annually

When you think about why buying life insurance is important, you probably think of financially protecting your family and loved ones in your life when you pass away. With life insurance in place, you can help ensure financial support for those that matter most. But have you spent time reviewing your life policy and ensuring it still meets your needs since purchasing it?

Life happens. Things change from one year to the next. That’s why we recommend an annual life insurance review — to revisit your coverage and ensure your policy matches the contours of your life today. Because so much can happen in 12 short months, we’ve put together this list of 10 key reasons for reviewing your life policies every year.


Why Should You Annually Review Your Life Insurance Policies?

One great reason to review your life insurance annually is to explore changes that have recently occurred and consider whether additional coverage is needed. If you do choose to increase the amount of coverage, in most cases you’ll need to apply for and then purchase a new policy. Because term and whole life insurance premiums typically increase as you age, the new rate may be higher for the additional policy.

Here are a few examples of life events that can shift your finances and trigger a change in your coverage needs:

1. The birth or adoption of a child into your family

If a baby’s on the way or you’ve just added a little one to the family, you’ll want to be sure that you’ve got life policies in place to help ensure your family’s financial future. If you or your partner were to pass away, that protection can help cover the resulting loss of income.

You may also want to consider a DreamSecure Children’s Whole Life Insurance policy. With it, your child will have coverage that can be adjusted as they grow.

2. Beginning a new job

Few things in life can open the doors to your goals like landing the job you’ve been hoping for. Making progress toward your dreams is a big accomplishment. If you’ve recently been promoted or started a new position, check in with your agent to ensure your policy still meets your needs. It’s key to account for extra income and any changes in your employer-based life insurance policy, too.

3. Starting a new business

Whether you’ve opened a new online store or launched a brick-and-mortar commercial venture, your big investments probably came with a big loan or may be the result of a large personal contribution.

If you had earmarked the savings you’ve since invested for inheritance, an additional life policy may be necessary to make up the difference and ensure your loved ones are provided for if you were to pass away. And if you took out a loan that your loved ones could be responsible for, you’ll want to know that you have enough life insurance to cover this new obligation.

4. Taking on more debt

Did you acquire a home equity loan last year or get a loan to consolidate credit card payments to lower your interest rates? Those small shifts in your finances can make a big difference when your loved ones are on a fixed income.

It’s always a good idea to bring an updated monthly budget to your annual life insurance review. With it, you can help ensure that you’re leaving your beneficiaries enough to pay the bills and to afford their present living expenses.

5. Changes in parent’s health or living conditions

An aging parent’s medical condition may require them to move. When that results in assisted living or moving in to your home, you may be taking on a greater monthly financial load.

If your family has experienced this kind of change, you may want to consider purchasing an additional policy so your beneficiaries can better cover those increased costs. You may also want to consider final expense coverage for your elderly parents at the time of your review.

6. Getting married or divorced

Few changes in your life will be bigger than a shift in your marital status. If you’re recently engaged or married, you’ll probably want to be sure your partner’s named as a beneficiary on your life policy.

If you were recently divorced, you may want to verify that your beneficiary designations are still correct. When this step is overlooked, previously named beneficiaries could be legally entitled to funds you may want others to now receive.

7. Children moving out or off to college

As kids grow up, they move on. And when your young adults go off to college and they’re still financially dependent on you, it’s wise to verify that the death benefit is enough for them to continue their studies and live independently.

If your children are now adults and financially independent, you may want to consider allocating the death benefit toward your surviving spouse. It can help shield your spouse from financial loss in the event of your death.

8. Medical diagnosis of a loved one

Health issues can emerge at any time and when they do, they can prompt a lot of change — often very quickly. As complicated medical conditions progress, they tend to become more expensive. It’s a good idea to take those future expenses into account when reviewing your life insurance policy.

9. Purchasing a home

If you’ve recently closed on the purchase of a new home, that’s a change you should review with your insurance agent. With a new mortgage now in play — and home equity gains on the horizon — you’ll likely want your family to continue living there if you were to pass away.

10. Verify insurance discounts are up to date

When you add a life insurance policy from American Family Life Insurance Company with your car or homeowners insurance, you may be able to save on your home and auto premiums.* Be sure to check in with your agent and verify your discounts are up to date.

Why You Should Review Your Life Insurance Coverage Today

With so many great reasons to revisit your life policies, it’s important to know that the life insurance company you select has the flexibility to carefully respond to your world as it changes.

American Family Life Insurance Company’s agents can customize policies according to your needs. In addition to well-crafted life insurance, you’ll also have the peace of mind that comes with the knowledge that your loved ones are covered when they’ll need that coverage most.

*Discounts may vary by state and company underwriting the auto or homeowners policy. Discounts may not apply to all coverages on an auto or homeowners policy. Discounts do not apply to the life policy.


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Related Topics: Whole Life , Term Life , Buying Life Insurance , Cash Value