Knowing When you Need to Update your Personal Insurance
by adminLife is not static; it’s dynamic, constantly changing. Likewise, your personal insurance needs are ever-evolving. With every milestone or major life event, reviewing your personal insurance coverage is wise to ensure that you and your loved ones still have the protection they need.
When should I update my personal insurance coverage?
Any major life change warrants a review of your personal insurance policy. But what is a significant event for insurance purposes?
Change in your family situation.
When your family situation changes, chances are your insurance needs will need to change along with it. Life events, like marriage or the birth of your first child, change the dynamics for those who depend on your financially; the best way to ensure that your loved ones are financially protected.
Getting Married
When planning a wedding, the last thing on your mind is likely to be your personal life insurance policy. But once the festivities are over, it is time to consider your personal life insurance needs.
Many new families fail to update their personal insurance policy when they are young, but that can be a big mistake. Insurance premiums increase with age; to get the best rate, you should lock it in when you are young and healthy. Later in life, some insurance providers may let you increase the amount of your benefit payout or add additional coverage. This will increase your premiums but by an amount significantly less than if you were to take out a new policy.
Or Getting Divorced
A divorce may not immediately necessitate a reduction in your personal insurance coverage, especially if you foresee yourself eventually getting married or you have children from the marriage you still need to provide for. However, it would be wise to update your beneficiary information if your ex-spouse was your beneficiary and you would like to name someone else in their place. This is generally a simple change that will not impact your premiums or policy.
Having Children
Kids change a lot, not just the amount of sleep you’ll get. When you begin your journey as a parent, it is important to consider your dependents’ present and future needs. Ask yourself, if something were to happen to me today, would your partner be able to manage all the household and childcare expenses on their own with your current insurance coverage? If the answer is no, it may be prudent to increase the amount of your personal insurance coverage.
Purchasing a Home
Odds are, buying your first home will be one of, if not the, most significant purchases you ever make; if something unforeseen happens, is your personal insurance coverage enough to cover the remaining balance of your mortgage and future carrying costs? Huge mortgage loans often put families in the precarious position of having to dip into savings or sell and uproot to a new location.
You can give yourself and your family peace of mind and prevent the forced sale of your family home by ensuring you have adequate personal insurance coverage.
Becoming an Entrepreneur
If you have decided to leave a salaried position to launch a new business venture, you may want to take a moment to review your personal insurance coverage. Many salaried employees receive personal insurance coverage as part of the employment benefits package; if you are no longer working for that company, your insurance coverage will likely end. However, some insurers may offer the option to continue your coverage by switching you from a group plan to a personal insurance plan. But you have to ask before your current coverage lapses.