Has Your Term Insurance Cover Kept Up With You?

Updated On Oct 04, 2021

When Should You Re-evaluate Your Term Insurance Plan?
Endnotes

Our financial objectives and requirements change as we progress through our lives. Therefore, it is crucial to have a term life insurance plan in place to ensure financial security during all of these stages. Furthermore, it is necessary to assess insurance coverage on a regular basis in order to stay up with changing financial needs. Since, term insurance is not a one-time purchase, you should check your coverage as you get older. This is necessary to ensure that the dependents' future requirements are suitably covered. Here's a rundown of when you should examine your term-insurance coverage at different phases of your life.

When Should You Re-evaluate Your Term Insurance Plan?

Here are some of the stages of life when you can check whether your coverage is keeping up with your goals.

Planning To Get Married

Your expenditures are likely to skyrocket once you marry. Your lifestyle will alter, and you'll be saddled with additional financial obligations. Groceries, phone bills, medical costs, apparel & accessories, and other household expenses will all rise. As a result, make sure you review your current term plan and expand it to account for the new financial obligations while keeping inflation in mind. In the event that you are unable to provide for your family, the revised term insurance policy will help them.

Parenthood

Bringing a new baby into the world is a wonderful event, but it also comes with a lot of duties. You weave a lot of fantasies for your child's future when you become a parent. You may want your child to pursue their own interests and dreams. Big dreams, on the other hand, come at a cost. You should begin planning now to ensure that your child has a great future. You can ensure that your term insurance coverage is increased to protect your child's dreams from unanticipated situations. When you are not present, the redesigned term insurance plan can give financial support to your family more effectively.

Getting Mortgage To Buy a House

Purchasing a home is a significant financial investment, and the majority of the time, you will need to take out a loan to complete the transaction. While a home loan helps you realise your dream of owning a home, it also raises your financial obligations. If you pass away, your dependents are responsible for repaying your outstanding loan. If you are unable to settle your outstanding loan, you may lose your home. As a result, if you buy a house or move to a more expensive property, you'll need to review your term insurance policy to ensure that you're covered for this additional risk.

Significant Changes in Income

Whenever you have a big change in your income, you should review your term insurance coverage as well. The reason for this is that increased income leads to a better lifestyle and higher household spending, which will continue even if you are not present. Therefore, if your income rises, check your term insurance coverage to guarantee that your dependents can continue to live their lives when you are gone.

Changes in the Family

Any change in your family's circumstances as a result of tragic life events like disability or an accident necessitates a review of your term insurance policy. For example, if one of your family members is permanently crippled as a result of an accident, your financial obligations will almost certainly increase. Therefore, you can upgrade your term insurance coverage to give appropriate financial protection for your family in this eventuality.

Endnotes

It is not enough to just purchase a term insurance policy and pay all of the premiums on time unless the plan is adequate to meet all of your needs. As a result, reviewing your insurance policy on a regular basis is an excellent method to ensure that your loved ones are prepared for life's various events. It is easier to update an existing insurance than to purchase a new one in the case of an unfortunate life event.