3 Things to Review Regularly on your Term Life Insurance Policy
Congratulations! You are now the proud owner of a new term life insurance policy, after diligently shopping, completing the application and exams, and waiting patiently to be underwritten … now what? Hopefully things are as anti-climatic as that after purchasing a policy. But that doesn’t mean it is something you tuck away in a desk and don’t think about ever again.
On a regular basis you are going to want to at least check on these three things on your existing life insurance policy:
1) Is my policy still active?
This may seem like a silly one, but seriously, I’ve seen a lapse in a policy happen many times and for various reasons. Make sure to check on a regular basis that your policy is still active. Check to ensure you are making regular timely premium payments. Life insurance is a long term commitment. During all that time, it is easy for daily life to get the better of you and before you know it, two months have passed since you paid a cable or electric bill. You do not want that to happen with your life insurance policy. If you do not pay premiums on time, your policy will lapse and you will have to start the application process – and be medically underwritten – all over again. This might not be such a big problem if the policy is fairly new – you are close to the same age and health most likely. But imagine if this happens in the 21st year of a 30 year term policy. You are now 21 years older, and let’s just hope just as healthy!
2) Check the beneficiaries
At least once a year you are going to want to review who you have listed on the policy as beneficiaries. Make sure your benefit is set to where you want it to go. Are they still designated the way you want? Do you have a contingent beneficiary listed? Did you recently get married or divorced? Updating beneficiaries is very easy to do. Typically carriers will ask you to complete a simple form or provide you with the option to update online. Annually, it is also a good idea to make sure the addresses for all interested parties (i.e.; owner, premium payor, trustee if owned by a trust, etc.) are current with the carrier.
3) Reassess the coverage amount
As the years go by your life insurance needs will likely change from what they were when you originally purchased your policy. You may need more, or even less now. It is typically best to assess your needs every time you experience one of life’s pivotal moments; birth of a child, a new job or promotion, marriage or divorce, purchase a new home. At these points you should be asking yourself if the coverage you have is still meeting your needs.
About the author: Seth Gowdy is the Sales Manager for Pivot Insurance and holds multiple insurance and securities licenses. He has been part of the financial services industry for nearly 20 years. In his free time he enjoys being outdoors fishing, hiking, and geocaching with his wife and two children. Seth most enjoys helping clients with Pivot’s anonymous life insurance quote process and needs calculators. You can reach Seth at 1-800-651-1953 or SGowdy@pivot.com.