The Importance of Reassessing Your Life Insurance Needs Regularly
Life insurance policies have gained importance in the ever changing world of today. With newer insurance companies emerging in the market, an individual also has a large number of choices for policies. Further, each company has various plans to choose from, which makes it doubly varied. From these options, it is the task of the individual to opt for one that best suit his/her needs.
Typically though, the tendency is that once a person has invested in an insurance policy, they quickly forget about it for the term of the policy. This attitude tends to result in people missing out on better options in the market in the longer run. There is an advantage in reassessing your needs annually to get the best deal for yourself. Even if you were to find that the policy you opted for in the first place was the best, there is satisfaction in knowing you have the best there is.
As a general rule though, most people find upon investigation that there is a better life insurance product in the market for their needs. Below are important reasons to re-examine your life insurance policies’ needs frequently.
Evaluating current needs
Changing personal circumstances like divorce, marriage, child, adoption, etc. are all circumstances to assess your life insurance needs. At every stage in our life, our needs are evolving. As a single working individual, your main requirement would probably be tax saving and lower premiums. If you have dependent parents, your need set would be different.
After marriage you would need to have an insurance policy that covers your spouse. You would also want to start saving up for any future children you might have.
You requirements change quite regularly, even if you do not realise it. When you examine them, you can then explore various life insurance schemes that best fit your needs. After having your first child you may feel the need to secure his/her future even when you are not around. If you carefully study your needs, you might find a life insurance policy that offers you more benefits for a family at a lower premium.
New products in the industry
With the many insurance companies and changing demand, life insurance policies are also undergoing changes regularly. Every year there are newer and better policies with benefits tailored to your needs. If upon reassessment you find that you do not wish to spend as much as you had previously anticipated, you could switch.
There might now be a policy in the market which caters to all your needs at a lower cost than the previous one.
Change in Income and Debts of the policy holder
Oftentimes, we forget that we have an existing life insurance policy which does not reflect our changed financial conditions. The importance of re-evaluating our policy needs comes into play then also. You would not wish to leave a burden of debt for your loved ones in case of a fatality, would you? Making provisions for the repayment of home loans and other debts are big triggers to examine the nature of your life insurance policy.
Similarly, if you have the potential to pay a higher premium for a better pay out on your policy, you should again explore the market for deals.
The benefits of assessing your needs periodically are plenty in terms of life insurance. With the uncertainty of life, you would wish to leave the best kind of legacy for your dependents and loved ones.