Jan
23
2009
Tips for reviewing your life insurance policy
Author: Byron UdellOnce you have purchased term life, don’t just file it away. It’s important to review your policy on a regular basis. When life changes – such as a birth, divorce, remarriage or even a new mortgage or job – you should review your policy.
Make sure the death benefit covers your current needs. In the case of the birth of a child or a new marriage, you might want to increase it. On the other hand, if the mortgage is paid and your children have completed college, you may want to lower it. Or, if you health has changed you might want to exercise you conversion privileges.
Keep in mind that life insurance rates have come down dramatically. It might make sense to replace your old policy and purchase a new one. For example, 10 years ago a healthy 30-year-old guy bought a 20-year level term policy with a $500,000 death benefit with an annual premium of $455 a year. Now, the same guy, age 40 is still in good health could take out a new 10-year, $500,000 level term policy and pay just $295 a year. That’s a 35 percent saving!
January 25th, 2009 at 12:20 pm
It’s a good idea to review your life insurance plan for you and your spouse every 1-2 years. Make a point to re-assess your needs, and the cost of your current plan.
As rates decline, there amy come a time to consider comparing rates for new policies which may offer a substantial savings on your life insurance, especially if you have term life insurance.