From school to university, settling down with a partner, new jobs, divorce, redundancy… It’s clear that life is not static. A life insurance policy you took out when you were single might not offer the level of protection you need if you have children. Similarly, life insurance that you took out when you were 20 may be inadequate for your needs as you approach retirement.
That’s why it’s important to review your life insurance as you progress through life. Here are some key events in your life when you may want to do this.
Getting married or co-habiting
Moving in with someone might bring a different focus to your responsibilities. If you’ve previously held a single life insurance policy, now’s the time to revisit your plan to ensure that it pays out to your intended beneficiary when you die.
Single or joint couple insurance: which is best?
Buying a house
Buying a house is probably the single biggest debt that most people will have in their lives, so it makes sense to protect that debt for your loved ones when you die. Mortgage life insurance, which is sometimes known as decreasing cover, is designed to help cover a repayment mortgage. With this product, in the event of your death, your loved ones can pay off your outstanding mortgage. If you’ve just bought a house, now might be the time to review your life insurance policy to make sure you have protected everything you want it to.
Typically, parents want to ensure that their children are provided for. One of the ways they could do this is by taking out life insurance when they’re born. The money might be used to help them at university when they're older, or perhaps to give them a step onto the property ladder. Level cover is designed to pay out a sum of money to your family if you die as long as the policy is still in force, and the premiums are up to date. Having children is an opportunity to review any policies you have in place.
Some companies offer a death-in-service payout to your family if you die whilst still working for them. If you already have an insurance policy in place, it may be tempting to cancel it, but it's worth bearing in mind that death-in-service is applicable only when you’re in employment to that employer. If you change jobs, you might not be able to take the benefit to your new one.
In addition, if you start a new plan, you might not be able to get the same rates you were offered in your original plan. It's likely that you'll be older, and so your premiums could rise. Your new job might come with perks - like a higher salary. If that's the case, you may want to review your life insurance to ensure it’s in line with the standard of living that you want your family to enjoy when you die.
When you are sorting through all the paperwork that inevitably comes with a divorce, you might want to revisit your life insurance plan to ensure your beneficiaries are still who you want to leave any money to.
As you approach retirement, your children may have left home and your mortgage may have been paid off. Wherever you are, it’s a good idea to review your insurance plan to ensure it meets your needs for where you are now in life.