How Often Should You Review and Update Your Life Insurance Policy?

Life insurance is essential as it provides financial protection and support for loved ones in the event of the policyholder’s death, helping to cover immediate expenses and long-term financial needs. Regularly reviewing insurance policies ensures they remain aligned with changing life circumstances and guarantees that the coverage adequately addresses the evolving needs of the insured and their beneficiaries.

Reviewing and updating your policy is essential to ensure it aligns with your current financial and personal circumstances. As a general rule of thumb, it’s advisable to review your policy at least once a year. However, certain life events should prompt an immediate review. These events include marriage, divorce, birth or adoption of a child, significant changes in income, major purchases like a home, or retirement. 

Additionally, if you experience improvements in your health or lifestyle habits, you might qualify for better rates or coverage. Discussing any changes with a qualified insurance agent can help ensure your policy adequately protects your loved ones and meets your evolving goals and priorities.

When figuring out how much insurance to take out, several critical factors should be carefully considered. Calculate your current and future financial obligations, including outstanding debts like mortgages, loans, and credit card balances, to find out how much protection your loved ones need. Consider the cost of living for your family, including daily expenses, education, and healthcare. 

Evaluate your income and how much of it would need to be replaced to maintain your family’s current lifestyle. Factor in your dependents’ needs and future goals, such as their desire to pursue a college degree. Additionally, account for any existing insurance or savings that can be used to cover some expenses. Take into account your age, health, and lifestyle, as they can impact your insurance rates and coverage eligibility.

The best way to review your policy is to work with an insurance professional. An agent possesses expertise and industry knowledge, enabling them to provide personalized guidance, identify coverage gaps, and explore better options that suit your specific needs. Reach out to us at DTRT Insurance to get started.