Getting life insurance at a younger age can ensure that you get cheaper coverage. Yet, the amount of cover you get in your 20s or 30s could be significantly different from the amount of life insurance you need later on in life. Circumstances change, which means so will your need for life insurance. At My Cover Expert, we look at some of the reasons why you may want to review your life insurance
1) You have children
The average cost of raising a child sits at around £230,000 with costs of childcare alone reaching an average of £67,586 per child in 2015.
If you were to pass away would your spouse or partner be able to cover these costs alone?
When you have children, it could be worth reviewing your life insurance policy. It’s not just the cost of childcare that would need to be covered, but food, clothing, education and leisure activities too.
In order to maintain their current lifestyle, you may need to increase your life insurance policy.
In contrast, when your children reach adulthood they may be self-sufficient and no longer rely on your income. Therefore, once your children are grown up you could look at reducing the amount of cover.
2) Buying a new home
One of the most common reasons for obtaining a life insurance policy is to cover a mortgage. If you were to pass away, the last thing you would want is for your family to be forced to move.
A life insurance policy can help to provide the funds to keep up the mortgage payments.
When you move home to a bigger property, you may want to increase your life insurance accordingly. Similarly, as you pay off the mortgage of a property, you may feel less of a need to have so much cover in place, which could call for a review of your life insurance.
3) Changes in your income
Life insurance can replace an income in the event that someone passes away.
If your income were to increase significantly, it may be worth reviewing your life insurance policy. Increasing life insurance in line with income changes can help to protect your family in the event of your death.
It can help to pay the bills, the mortgage and help them to maintain their current standard of living.
4) Lifestyle changes
There is an ample number of things that affect your life insurance policy. Your current lifestyle is one of them. This includes your smoking status, blood pressure and BMI.
If you stop smoking or lose weight, you may be able to get cheaper premiums, so it might be worth it to review your life insurance.
In addition to this, you may have paid off debts which decreases the need for life insurance.
Alongside a positive bank account, your spending may have increased. Therefore, your current life insurance may leave a gap if you were to pass away.
It’s always best to obtain life insurance to cover your current lifestyle. That way, your loved ones have more time to adapt and won’t suffer from financial difficulty.
5) You’re getting older
As you get older there are a number of different reasons as to why you should review your life insurance policy.
Perhaps, your policy is about to expire, or you’re preparing to retire. In addition to this, you may have a new mortgage, or paid off an old one, your children may be grown up or your assets may have increased.
Each of these situations may initiate you to review your life insurance policy.
What’s more, your beneficiaries may have changed. For example, you may have grandchildren that you would like to add to your policy.
Your life insurance policy can be reviewed at any time. However, it’s important to bear in mind that prices increase with age. Also, if you were to suffer from a health condition, it can cause an increase in your premiums.
If you’ve had a policy for a long time, it may be better (and cheaper) to get another life insurance policy to top it up. Or, keep the amount of cover you have and ensure that your family are protected in the event of your death.