How often should I update my life insurance policy?
If you have life insurance, then it’s important that it reflects your current requirements. As many policies run for decades if not longer, what you signed up for originally is unlikely to be suitable all the way through your term. Changes in your personal circumstances, health and relationships can all play into this, meaning that you need to make changes. But how often should you be reviewing your policy?
While there is no official time period, a generality rule of thumb is that you should take a look at your contract once every 12 months.
If your life hasn't changed dramatically in the last year, you might wonder whether you still need to do this. But even in these circumstances, it’s useful to remind yourself of what you covered, as the simple process of looking over your contract might remind you that certain alterations need to be made.
If significant changes have happened, you might want to review them earlier. These include:
- Additions to your family such as children or grandchildren might mean you need to expand or change the beneficiaries
- Changes in your income that might cause you to re-address the level of cover you have
- Either paying off your mortgage early or re-mortgaging your house if your policy is designed to cover mortgage costs
Fortunately, making changes is a relatively painless process. Life insurance is very flexible, and as you are able to stop paying at any time, insurers generally have no problem making alterations to reflect your updated circumstances.
If you’re not sure how to go about this, get in touch with your insurer and find out from them what the best course of action is.