Knowing When to Review Your Life Insurance Policies: A Comprehensive Guide

Life insurance is a crucial aspect of financial planning, providing peace of mind and financial security for your loved ones. However, it’s not a one-and-done decision. Regularly reviewing your life insurance policies is essential to ensure they align with your evolving needs and circumstances. In this guide, we’ll explore when and why you should review your life insurance policies.

1. Life Milestones: Life is dynamic, and major milestones often trigger the need for a life insurance policy review. Events such as marriage, the birth of a child, purchasing a home, or sending your kids off to college can significantly impact your coverage requirements. Regularly reassess your policies to accommodate these changes.

2. Career Changes: A change in your professional life, such as a new job or a significant promotion, can affect your financial situation. If your income increases, you may need to adjust your life insurance coverage to adequately protect your family’s financial future.

3. Health Status: Your health plays a critical role in determining life insurance premiums. If you’ve experienced improvements in your health or have adopted a healthier lifestyle, it might be worth exploring if you qualify for lower premiums. Conversely, if your health has declined, it may be too late to make many adjustments.

4. Policy Performance: Review the performance of any investment components within your life insurance policy. If you have a variable life insurance policy tied to market performance, fluctuations in the market can impact your cash value and death benefit. Regularly assess whether your policy aligns with your risk tolerance and financial goals.

5. Policy Features and Riders: Life insurance policies often come with various features and optional riders. Review these periodically to ensure they still meet your needs. For example, if your policy includes a disability income rider, evaluate whether it provides adequate protection based on your current circumstances.

6. Estate Planning Changes: Changes in estate tax laws or your overall estate planning strategy may necessitate adjustments to your life insurance coverage. Regular reviews with your financial advisor can help ensure your policies align with your broader financial goals.

7. Market Conditions: Keep an eye on the insurance market. Periodically compare rates and offerings from different insurers to ensure you’re getting the best value for your coverage. A competitive market may present opportunities for cost savings or improved policy features.

Regularly reviewing your life insurance policies is a proactive approach to financial planning. By staying attentive to life changes, adjusting for evolving needs, and keeping an eye on market conditions, you can ensure that your life insurance coverage remains a solid foundation for your family’s financial security. Don’t view life insurance as a static investment; instead, see it as a dynamic tool that can be optimized to reflect your changing life circumstances. Always consult with a financial representative to make informed decisions tailored to your unique situation.

Investment advisory services are offered through Fusion Capital Management, an SEC registered investment advisor. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. SEC registration is not an endorsement of the firm by the commission and does not mean that the advisor has attained a specific level of skill or ability. All investment strategies have the potential for profit or loss.