7 Reasons to change your life insurance
I once heard that there are 7 reasons or times people will change their life insurance. The speaker never shared what they were, but let me give you 7 reasons why one may want or need to reevaluate their life insurance.
Generally, it is good to review your policy every 1-2 years and make sure your circumstances have not changed.
1. The wrong product. – This one is personal. I have someone close to me that was sold not one, not two, but 4 policies. Upon sitting down to review them, I found out they were trash products. n What I mean was the product was not set up correctly and could not be used for its intended purpose. On top of that, the products were the wrong product for the needs then and now.
2. You got married – Perhaps you started with a policy when you were single, but now you have different needs and responsibilities. Perhaps you got a divorce that also could bring different needs and obligations.
3. You have kids – One of the reasons you get life insurance is to provide for loss of income to care for your family. This is a great time to reassess the needs and add more insurance to cover the essentials.
4. Started a business – Life insurance may be needed if there is a partnership with a buy-sell agreement. Life insurance can be used to help with tax advantage savings. Also, if there are new debts and responsibility, you will also want to make sure they are paid if you pass. (don’t forget about critical illness or disability – if you get sick or hurt, this helps cover the bills)
5. Bought a house or cottage – There are two ways life insurance helps here. One life insurance is a better option than mortgage insurance – Learn more here. Second, if you own a cottage and intend to pass it on to your family, there will be tax implications. Life insurance can help cover that cost.
6. Planning on retiring – There are so many things that change during this transition for people. If you depended upon work insurance, now you need your own. (by the way, work insurance is generally never enough- learn more here ).
7. Caring for ageing parents – This is one I never thought about at first. However, if you are responsible for your ageing parents, something should happen to you what will happen to them.