When most people purchase a life insurance policy, they do not usually review it as often as they should to make necessary updates. Dealing with life insurance is something that most people consider unpleasant, but it is a very necessary part of making sure survivors are properly provided for. It is also important for covering final expenses, which can otherwise leave loved ones financially strapped or may make them go bankrupt in some cases.
Life is not static. It is common for a person’s circumstances to change. People may buy a house, start a new job that pays more, get married, have more children or start taking care of an aging parent in their own home. All of these life changes are also good times to review and modify a life insurance policy. For example, a man who purchased a policy when he had a spouse and two children might not leave enough behind if he did not update it after having one or two more children or receiving a job promotion. As a rule, life insurance benefits should always be commensurate with current living situations and life details.
Even if the year passes and there are no major life changes, it is still wise to review personal coverage. Keep in mind that a policy should not just cover expenses for a funeral and a few months’ living expenses after death. Survivors will probably require at least a few months to recover. Every person should decide how much is necessary based on an agent’s suggestions. People who are the main earners for the family and have children who they want to attend college may also want to make sure there are enough funds that children can pay for tuition and some other expenses.
Life insurance is not only necessary for people who work. A spouse who stays home to care for children should also have enough life insurance to cover child care expenses and any costs associated with keeping up the home. People who are single and have no heirs may think they do not need coverage, but they should always have enough to cover their own funeral expenses and any debts. They may also choose to purchase extra coverage so they can leave a sum to a charity, family member or friend of their choice.
While reviewing coverage every year, it is helpful to confirm beneficiaries and their information. Keep addresses and phone numbers current. When there are any doubts that coverage will not be adequate for supporting survivors, it is important to discuss any concerns with an agent as quickly as possible. Life insurance is not a pleasant topic to think about or discuss, but being prepared and covered is important.
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