Why Review Your Life Insurance and Update Your Beneficiaries?
You figured it out. You got the right amount of life insurance coverage you need, figured out what type of products were best and purchased a life insurance policy when you were young and healthy. But... when was the last time you reviewed your policy?
According to the National Association of Insurance Commissioners, you should regularly review your life insurance coverage. As a general rule of thumb, you should review your life insurance policy annually. Major life events such as marriage, divorce, death, birth of a child/empty nesters, or major purchases call for immediate review of coverage to make sure your policy is still meeting your needs.
What to Review
Things to consider when reviewing your life insurance policy:
Amount of Debt
Permanent or Temporary Coverage
Policy Performance, if cash value is included
When reviewing your policy, make sure you have enough benefit to cover your needs.
One of the most important thing when it comes to life insurance is choosing who to leave your benefits with. That's why it is important to review your beneficiaries.
The two types of beneficiaries are your primary beneficiaries and your contingent beneficiaries. Your primary beneficiaries receive a portion or the whole benefit if they outlive you. Your contingent beneficiaries receive a portion or the whole benefit if the primary beneficiaries die before you. If you list more than one beneficiary in either category make sure you specify the percentage of the benefit you wish each individual to receive, or state "shared equally" for each.
During your annual visit, be sure to consider the changes in your life, relationships, and family - such as births, adoptions, marriages, remarriages, divorces and deaths — when updating your beneficiaries.