To give adequate protection to your family, it is essential to adjust your life insurance coverage as you go through different stages in life. Some of the top reasons that make life insurance re-evaluation a must is discussed in this post.
As life insurance is a long-term product, many people do not review the policy once they purchase it. But it is important to evaluate the policy periodically as your needs change with time. For instance, if you are not married and your current monthly expense is Rs. 20,000, do you think that the expenses would remain the same 10-15 years down the line after you get married and start a family? Definitely not. So, how can you expect a life insurance policy’s coverage to remain adequate throughout the different stages of your life?
This is why it is so important to re-evaluate your life insurance policy regularly and adjust the coverage amount of your life insurance policy accordingly. Here are four situations when you must re-evaluate your life insurance cover.
- Getting Married
If you were not married at the time of purchasing life insurance, you might have mostly not considered your spouse when calculating the coverage you need. But now that you are married and have more responsibilities, it can be an excellent time to increase the policy coverage.
Also, as more and more couples now share the financial responsibilities of their household, it is essential that both of them have their individual life insurance policies.
- Starting a Family
Your life would go through several significant changes once you have your first baby. One of the biggest of them would be related to finances. Needless to say, your child will financially rely on you for at least 20-22 years. You need to make sure that the life insurance coverage would be adequate to take care of the additional member in your family should something happen to you.
Similarly, you should increase the policy coverage even when you have your second/third child. As the number of people relying on your income increases, you should consider reviewing your policy.
- Purchasing a House
Being a homeowner is one of the biggest accomplishments of life for most people. Just like the majority of the people, you might have taken a home loan with a repayment tenure of at least 15 years for the same. But who can say whether you will survive through this entire repayment tenure?
For added financial protection of your loved ones, you should increase the life insurance coverage to cover for your big loans and liabilities such as a home loan.
- Salary Increment
If you observe, you will see that yours, as well as your family’s lifestyle changes, when you start earning more money. If you purchased online life insurance in the starting years of your professional life, salary hike could be a great reason to consider increasing policy coverage.
This will help you make sure that your family can continue with the same lifestyle should something happen to you.
Selecting the Right Life Insurance Coverage
These are some of the most practical reasons why you should review your life insurance. Whether you are about to enter any of the phases discussed above or already deep in it, it is never too late to re-evaluate and select a coverage amount after a thorough analysis of the current and future needs of your family.