What are the Reasons that Emphasize the Need to Review Term Insurance Cover Every Year?

A term insurance policy helps your loved ones sail through financially tricky times after your demise. Hence, it is crucial to update your coverage according to your changing family needs and goals. Moreover, why should your life insurance coverage remain the same while your salary increases year after year and your family grows along with your financial obligations? As your lifestyle and income change over time, it's also important to consider updating your insurance coverage. The following article elaborates on the necessity of policy upgradation to help you understand the importance of regular reviews.

What are the Reasons that Emphasize the Need to Review Term Insurance Cover Every Year?

Consider the following compelling reasons to examine your life insurance coverage if you are still not convinced.

• Ageing Parents

You might be young, healthy and single and think that reviewing your policy coverage is not necessary. Still, you must remember that your ageing parents will become dependent on you with time, and thus you must arrange for their financial protection if anything unfortunate happens. Riders like the accidental death benefits, accidental disability benefits will help them pay for the medical expenses in case of an unforeseen accident.

• Debts or Loans 

Suppose you have taken out a loan like student loans or have acquired credit card debts since the last policy review time. In that case, you might consider reviewing your policy coverage to make it equal to your remaining loan or debt instalments and obligations. This way, you ensure that the burden of repayment of your loan and debts do not fall on your loved ones. 

• Marriage

When you get married, your number of dependents starts to rise. As a result, you won't be able to keep the same life insurance coverage for your term plan that you had when you were single. Hence, it becomes essential to review your policy coverage to help meet the increased responsibilities of your spouse. 

• Childbirth

Following your marriage, it is inevitable that the size of your family will grow, starting with your spouse and progressing to children. As a result, the number of people who rely on you will rise once more. Your desire to provide additional financial security for your family grows, and thus, you should examine your policy every year to update and enhance the life insurance coverage.

• New Home 

Everyone desires to live in their own home. However, having thousands and crores of cash on hand is not an option. As a result, many take out home loans to realise their dreams. In this instance, the cost of a home loan may pose a threat to you, as such a large financial strain should not be placed on your family. Hence, it is beneficial to update your policy to meet such obligations. 

Take Away

The reasons mentioned above should be enough to convince you to regularly update your term insurance policy according to your changing needs and lifestyle. Moreover, you can consult your insurance company, an insurance agent or a financial advisor to review your life insurance policy and see if you need to make any changes to keep up with your evolving requirements.

Also read 

How To Choose the Right Sum Assured for a Term Plan?

When is the Right Time to Buy a Term Plan?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.