Is It Time to Review Your Life Insurance?

​Regular review is an important part of financial planning. Life can change quickly, and when it does, it’s important to make sure your financial strategy still aligns with your needs and goals. For many people, financial review often means analyzing investments, budgets and other documents.
 
You may not think of life insurance as the type of financial tool that needs periodic review and analysis. After all, you purchase the policy, pay the premiums and enjoy the knowledge that your loved ones are protected if you should pass away. What’s there to review?
 
The truth, though, is that your life insurance may not be right for your needs if your life has changed. That’s especially true if you bought your insurance long ago. Below are a few questions to ask about your life and your objectives. If you answer yes to any of these questions, it may be time to sit down with a financial professional.

Has the number of people in your household changed?
 
People often purchase life insurance to protect their dependents. If you’re the main financial provider in the household, you may have a spouse, children and others who rely on your income. If you pass away, they could face a wide range of financial challenges, including debt and loss of income. They may have to put off major life goals such as college or retirement.
 
As the number of dependents in your household changes, so too should your life insurance coverage. If you have additional children, you likely need more protection. Similarly, if your kids grow up and move out of your house, you may not need as much coverage.
 
Marriage and divorce are also important things to consider. If you get married, you may need to review your coverage, especially with regard to your beneficiary designations. If your spouse isn’t named as a beneficiary, he or she will not receive the death benefit. People often get divorced and remarried but forget to change their beneficiary designation. The risk is that your former spouse could end up with the life insurance proceeds.

Have you made a major purchase or taken on sizable debt?
 
Many people also use a major purchase as a time to buy life insurance. The classic example is a new home. Assume you purchase a home and take on a significant, long-term mortgage. Many lenders require a borrower to also carry life insurance to cover the balance. Even if the lender doesn’t require insurance, however, it may be a wise idea. The insurance proceeds could help your spouse or children cover the balance if you pass away.
 
You also may want to consider life insurance if you take out a loan for any other major purchase. Think about whether your dependents could cover the loan payments without your income. Also consider whether they could easily sell the asset to pay down the loan. If the answer to both of these questions is no, then more life insurance may be a smart strategy.

Have you changed jobs?
 
Did you change jobs recently? Or perhaps start your own business? If so, you may want to review your insurance coverage. Many workers rely on employer life insurance benefits for coverage. However, if you changed jobs, it’s possible that your new employer doesn’t offer the same level of protection.
 
Your new role may have also come with a raise. If you’re earning more money, your family stands to lose a greater amount of income when you pass away. That means they may need more insurance coverage to fill the gap. Additional protection may be necessary. The only way to truly know whether you have an appropriate amount is by conducting a detailed needs analysis with your financial professional.
 
Is it time to review your life insurance strategy? Contact us today at Thomas Financial. We can help you analyze your needs and adjust your plan. Let’s connect soon and start the conversation.
 
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
17962 – 2018/9/4

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