Life insurance changes to consider now

As part of your financial planning, you may have decided to purchase a life insurance policy, such as to protect your family in case you pass away early in life. Or, perhaps you purchased a whole life insurance policy, thinking that could help your family while also having an investment component that you can benefit from during your lifetime.

But maybe it’s been a while since you first purchased your policy, and the initial coverage terms might not be the best fit for your current circumstances. That’s why it’s good to review your life insurance policy periodically. At the very least, you can re-familiarize yourself with your policy, and you also might find that you want to make changes to better suit your needs.

If you’re in the market for life insurance or want to adjust the coverage you already have, then start by getting a free online price estimate now so you know exactly what to expect.

Life insurance changes to consider now

Here are four life insurance changes to consider making:

• Change policy type

If you have a whole life insurance policy, that doesn’t automatically mean you’re locked in for life. Instead, you might realize that you’re mainly looking for life insurance protection during your working years, for example, so perhaps switching to, say, a 20- or 30-year term life insurance policy makes more sense. Term policies often have lower premiums than whole-life ones, and perhaps you no longer need as much financial security once you’re retired, due to a healthy retirement portfolio.

Or, perhaps you want to change from a term to a whole life insurance policy, such as if you don’t want to have to re-apply and take a medical exam to obtain new coverage as you age. Some people also like the peace of mind that comes with having whole life coverage, along with the cash value these policies can build.

So, you might look into converting your term policy to a whole life one, which many providers allow. Or, you might cancel your current policy and take out a new one that’s a better fit, like a universal life insurance policy, which can be more flexible. Just check with your insurance provider for specifics on their cancellation policy (there may be you fees if you replace a policy).

• Increase coverage

Sometimes you can change the coverage of your existing policy rather than taking out a new one. For example, you might want to increase life insurance coverage as you go through life milestones like starting a family, buying a house, or getting a big promotion.

Perhaps when you first bought your life insurance policy, you didn’t need as much financial protection because you had fewer people to take care of or fewer liabilities. But if you start earning more and take out a mortgage, for instance, you might want more coverage to replace that higher income for your family’s sake, as well as covering any remaining mortgage debt.

• Change providers

Changing providers can help if your current insurance company doesn’t offer a policy that meets what you’re looking for. Or, you might find that shopping around helps you find a more cost-effective policy, whether that’s by paying lower premiums or getting more bang for your buck in terms of cost vs. coverage.

Here too, changing providers can come with some nuances, like paying surrender fees. So, you’ll want to look into the specifics with your current insurance provider and see how that compares to what could be your new one.

• Change beneficiaries

When making life insurance changes, don’t forget to review who you’ve named as your beneficiaries. Perhaps you’ve gone through life changes, like a marriage, divorce, or the birth of children. You can have multiple beneficiaries, so maybe at your current stage in life, you want to move from having, say, one beneficiary to two who would split the proceeds 50/50.

Taking care of this issue is important if you want your life insurance benefits to be distributed according to your wishes. Otherwise, your heirs could face difficulties like getting into legal battles around life insurance claims.

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The bottom line

Looking into these types of details can help ensure that your life insurance policy continues to best serve you. Don’t feel like you’re trapped based on your initial purchase. These types of life insurance changes can help you find a policy with the right terms for your situation.