What is a life insurance policy review?

How often should I review my life insurance policy?

At a minimum, you should conduct an annual life insurance review. No matter how long it's been since your last review, you should review your policy after any major life events involving changes to your family, health, or finances. Life events can change how much life insurance coverage you need and who you want as your beneficiaries.

Changes to your family

The amount of life insurance coverage you need, and who you want as your beneficiaries, depends in part on the people who count on your income to cover their expenses. Here are some family events that should be part of your life insurance policy review checklist:

• You get married or divorced. Changes in marital status might affect who depends on your income. It's a good time to review your beneficiaries and consider adding or removing coverage.
• You have or adopt a child. Your kids rely on you for financial support. Adequate life insurance coverage can help ensure your loved ones are financially taken care of in the event of your death. It can be complicated to name minor children as your beneficiaries. But if your spouse or partner is a beneficiary, consider increasing your coverage — a child will increase their potential costs if you were to pass away. Learn more about life insurance for new parents.
• You're financially responsible for an aging parent or loved one. If your parents or others have become dependent on your income, make sure you have enough coverage to take care of them in case you pass away first.
• Your partner stops working. If your spouse or partner doesn't work and you're the sole breadwinner, your income becomes even more essential to replace if you were to pass away unexpectedly.
• Your children don't rely on you for financial support anymore. If it's possible to decrease your coverage, consider doing so after your children are no longer dependent on you (unless you have new costs, like a new mortgage, that you want to help cover instead).

Changes in health

If you or a loved one experiences a significant improvement or decline in health, it could increase or decrease the amount of coverage you might need. As part of your life insurance policy reviews, consider the following:

• Children with special needs. If your child requires lifelong care, you may want more coverage to support them once you're gone.
• Serious medical conditions. If you or your partner has high healthcare costs that you're currently paying for, the healthier partner might want to increase coverage to help with the medical bills in case they pass away. It may be more expensive and difficult for the less healthy partner to increase their coverage.

Changes to your finances

Your life insurance policy's death benefit can help your loved ones cover outstanding debt and living expenses after you're gone. Make time for a life insurance review when:

• You change jobs or get a promotion. If your income has increased significantly, you may want to increase your coverage so your family can maintain their current standard of living after your death.
• You take out a new loan. If you recently financed a new car or house, review your life insurance to make sure the death benefit is large enough to cover paying off any new debts you share with your loved ones.
• You pay off your house, car, or other debt. If you significantly reduce the amount of debt you owe, you may need less coverage.
• You have a financial windfall. If you receive an inheritance or significant income increase that can help supplement your dependents' income if you die, you might not need as much coverage.

What should I look at when reviewing my life insurance?

Reading through your policy and familiarizing yourself with key sections will help you understand your coverage. Review your life insurance by checking the hard copy of your policy, logging into your online account with the insurer, or talking directly with an agent.

1. Read the cover page. This contains your personal information and policy type. Double check the cover page to catch any errors.
2. Review the schedule of benefits. This page summarizes your coverage and includes items such as your policy number, premium amount, beneficiaries, term length, and more. Checking your policy every year can help you avoid losing coverage by accident — called a life insurance lapse.
3. Check your coverage amount. Determine if your death benefit is still adequate based on your current situation. Use our life insurance calculator to estimate your coverage needs and compare different scenarios by adjusting the values.
4. Review your beneficiaries. Make changes if necessary due to marriage, divorce, the birth of a child or the loss of a loved one.
5. Look over your term length. If you have a term policy, see how much time you have left before it expires. You may need to renew, or you may want to convert to a permanent life policy.
6. Review supplemental coverage needs. You might consider activating any life insurance riders relevant to your current situation or looking into new life insurance products that may now suit your needs.
7. Check the insuring agreement section. This explains how your policy works and may include details about cash value, conversion options, exclusions, and more.

Learn more about how to read a life insurance policy document, and consider consulting a licensed Progressive Life by eFinancial representative or financial advisor to get advice tailored to your personal situation.

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