It’s that time of the year when everyone gets busy clearing out all signs of winter and doing some spring cleaning. You declutter your home and decide what can be fixed or stored for next year. Why not use this opportunity to dust off your financial files? You’re already prepping the paperwork to file your tax returns so reviewing your life insurance policies should be part of your research to make sure you have adequate coverage at the most competitive rates.
Life insurance may not be your top priority, after all, no one wants to think about their demise. But let’s face it; mortality is a fact and when the inevitable happens, it will be too late to rectify any past decisions. So ye, life insurance planning is a critical decision that you need to face to make sure the people you love are protected and ready for a future without you. If you want them to have a financially secure life after you are long gone, having an effective life insurance policy in place is the way to go.
Review your current life situation— a new phase or change with the new marriage, the birth of a child, aging parents, taking on a mortgage, starting a new business, and even planning for retirement. All of these major life events will affect your life insurance needs. While term life policy is the most affordable and effective form of protection you can provide for your family, comparing the best term life insurance rates from time to time could be beneficial. Rates today can actually be more competitive than the premiums you are paying on a 10-year old policy despite the fact that you are older, as long as your health is good.
Surveys show that most policyholders don’t take the time to review their life insurance policy routinely. According to the most recent study conducted by LIMRA, about 1 in 5 individuals who own life insurance realize that they do not have enough coverage to take care of their family’s future needs.
Therefore, while performing a financial spring cleaning this year, make sure your life insurance planning is on track by keeping the following things in mind:
This spring cleaning make sure you find all your life insurance documents and their original physical copies. You want to check if all policies are active (in force) and decide if you need to convert any term policy into a permanent one. If you cannot find your paperwork, you should contact the life insurance company to request the details of your policy. Most carriers offer online options to do this.
Once you crunch the numbers of your current financial situation and compare it to the coverage amount of your policy, you might conclude that you need to buy more. You have nothing to lose by requesting free, online quotes to see how much a new term life policy might cost. There is no obligation to buy if you just want to shop around for new rates. The most important thing to clarify here is to make sure that your loved ones future financial needs are covered and to tell your beneficiary(s) about the policy, including where the documents are safely stored.
That leads us to your beneficiaries—the person or people you designate as the recipients of your insurance payout. Beneficiaries are the ones who receive the death benefit amount after the death of the policyholder. While a primary beneficiary is required to have a life insurance policy, it is also recommended to add secondary (contingent) or tertiary beneficiaries.
A typical scenario would include your spouse being the primary beneficiary while your adult child or another loved one as contingent beneficiaries. It may also be wise to appoint a trust as your contingent beneficiary so your kids can easily access the life insurance proceeds when needed. Insurance professionals don’t recommend that you designate minors as direct beneficiaries. Discussing with a life insurance advisor before you make any decision is recommended.
Also note, that primary beneficiary can also be changed considering the situation. If your spouse dies before you or if you are divorced then this is the right time to review your life insurance policy and beneficiaries.
A death benefit is the amount paid to your loved ones when you the policyholder is no longer there to provide for them. It is the main reason you get an insurance policy in the first place so that it can compensate for the loss of your economic influence on the household.
During this financial spring cleaning, you should check the aggregate amount of the death benefit if you have multiple policies. The coverage you need may rise with the growth of the family and your standard of living, so it’s essential to analyze your needs and that if the amount your loved ones will receive will be enough.
If you realize that your current policy is not enough to satisfy your present-day needs, then it’s high time to find the best life insurance rates for the coverage amount you desire.
Not sure how much life insurance you need? Use LifeQuote’s free life insurance needs calculator to determine the amount of coverage you may need now or in the future.
Term life insurance quotes that you received last year may not be the best rates that are available to you now. With life needs changing every day, it is critical to check if your insurance policy is able to provide the protection your family deserves. So start your life insurance spring cleaning by making sure you have the right policy with the right coverage amount at the best life insurance rates available.
You can use our life insurance quote comparison tool to get the best life insurance rates available from top leading insurance companies in the market today. If you see a policy that interests you, you can apply for it online or call one of our licensed agents to provide you with more information.
Nothing in life remains static. Milestones and crisis are similar in that they have an impact on every aspect of your life, from emotional to financial.
Have you experienced any notable life events or changes since you obtained your current term life insurance? If yes, it’s time to review your coverage:
We recommend buying a new life insurance coverage before your current term life insurance expires. You can’t afford to keep your family unprotected while you are looking for new and improved life insurance rates.
The bottom line when it comes to life insurance policy reviews is consistency. Make it a regular occurrence on a specific date. So, this spring, let’s add a life insurance policy review to our checklist and make sure we do this financial spring cleaning every year in addition to traditional spring cleaning. Contact one of our agents today to schedule a life policy review with no obligation to change your current policies, or to buy new ones. We are here to help keep you informed about choices available to you in this life insurance industry.