Take a Moment to Ensure You Still Have the Appropriate Policies
Risk management should be the cornerstone of a sound financial strategy. However, insurance isn't a fun topic to discuss. No one wants to think about dying prematurely, having an accident, going through a natural disaster, or suffering from a crippling injury or disease. Denial doesn't make these tragedies any less likely to occur, but it does make them potentially more devastating than they might otherwise be. Proper planning can make it a little easier to get through tough times.
The primary purpose of life insurance is
to replace money that a person would otherwise earn and provide additional funds for any needs that arise because of a person's death. For instance, if a person is married with a child, then one might consider obtaining life insurance that would be sufficient to replace the person's income, as well as pay for the extra expenses that would result from the surviving spouse's new situation as a single parent.
to replace money that a person would otherwise earn and provide additional funds for any needs that arise because of a person's death. For instance, if a person is married with a child, then one might consider obtaining life insurance that would be sufficient to replace the person's income, as well as pay for the extra expenses that would result from the surviving spouse's new situation as a single parent.
The challenge here is that every one of these variables is constantly changing. Your earnings may rise steadily through periodic raises and bonuses. Your needs for insurance as a single adult may be quite minimal, but they may increase substantially if you choose to start a family. The key to keeping your life insurance up-to-date is to make sure that the total death benefit on any life insurance policies you have is sufficient to meet your needs at that time. If your insurance is insufficient, you may be able to obtain additional insurance, either from your existing insurance company or by obtaining a completely new policy. If you have more insurance than you need, then consider replacing a policy with one that has a smaller death benefit.
In addition, even if your current policy is sufficient, you may wish to consider checking the cost of a new policy with similar terms. Recent changes in actuarial assumptions about people's life expectancies have had a significant impact on insurance prices, especially for older policies. You may be able to save money by replacing your policy.
Also, while it may be smart to get rid of policies you don't need any longer, keep in mind that life insurance may have purposes other than simple asset replacement. Good financial professionals use life insurance for a host of other reasons, and choosing to terminate a policy without considering all of its uses may leave an unintended gap in your financial plan.
By taking this quick survey, you will enable us to help determine whether your coverage is still offering your family the appropriate level of protection.
These can be huge dollars that should remain in your pocket, if you had simply forwarded the information on to your insurance carrier. Be sure to ask your specific company for all available discounts and what it will take for you to get them!
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