Most
people tend to treat their term life
insurance policy like that poor plant
drooping in the window sill. Ignored
and avoided. It probably doesn't make
for daily reading but it's not a bad
today to dust off your life insurance
policy and review it once in a while.
Things change and over years, they
change quite a bit. Sometimes, this
change goes against you so let help you
review your policy. Just how often
should you take a look at that fun
reading piece of legal jargon? Good
question.
Before we get into how often, let's look
at what we should be looking for?
First, make sure the basics are correct
with particular focus on the beneficiary
information. Check out the address,
phone, and basic contact info that they
have on file. If there's an error or if
you have moved, make sure to update this
information with the carrier or the
term
life insurance agent (us). This can be
critical if payment isn't received in
any given year (such as credit card
numbers changed) and they send you
notification that payment did not go
through. If you never get the
notification, they can cancel the policy
and believe me, most life insurance
carriers would love to cancel the policy
(especially later in the term) while
pocketing all the premium paid to that
date. Don't allow this to happen and
make sure they have correct contact
info.
Next,
make sure the beneficiary information
still makes sense for your situation.
There are divorces, marriages, babies,
and just plain family estrangement. You
don't want to change your
life insurance
beneficiary info for some little
squabble over what movie to see but make
sure the big changes are accounted for.
The most common issue is relating to
divorces where the original spouse is
still listed as the beneficiary. You
can imagine that this is an interesting
conversation with the new spouse and by
interesting, we mean very unpleasant.
There's not much you can do at that
point.
If
you're incredibly diligent, we would
recommend reviewing your policy every
year. This is more than adequate unless
you�re in an incredibly volatile period
of time (divorces, babies, or both!) Of
course, any big life-changing event
occurs, that�s the time to update your
term life insurance policy as well.
You�ll probably catch it at the annual
review mentioned above but it�s best to
have it done right away. It�s Murphy�s
law that something might happen between
the time of the event and your next
annual review. It happens and we get
the phone calls when that occurs. Never
a good call to be on the other side of.
It�s also good to do it while it�s fresh
in your mind. Keep in mind that a new
baby will probably occupy all of your
remaining time, energy, thought, not to
mention sleep. A divorce or marriage
will also occupy your mental capacity as
well so try and get the term life change
done while it�s still fresh in your
mind.
Ideally, you review your policy when
large events happen but if you find the
annual review too often, at least come
back to the policy every 3-5 years to
make sure it�s up to date. Again, we
would prefer more often but that�s not
going to happen for some people. Keep
in mind also that
term life insurance
rates available on the market can change
as well. When you review your policy,
this isn�t a bad time to also run a
quick term life quote and make sure
you�re getting the best rate. Of
course, we�re happy to help with this as
well.
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